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PayPal Holdings Inc. announced early Monday it is launching a version of its Venmo peer-to-peer payment service tailored for teenagers. With the new program, parents holding a Venmo account can open one for a child aged 13 to 17 that will include a Mastercard debit card. Parents can exercise control over the Venmo Teen Account and will be able to view all activity in the account, PayPal says.
The development comes as payments companies have sought out ways to extend digital payment capabilities to teens while providing tools that will help children develop responsible money habits. Teens using the account are also thought to be more likely to become steady users later as adults, as well.
The teen account, which PayPal says comes with “the highest privacy settings,” could also act as a springboard for expansion of Venmo, a service that competes with a number of P2P services including other national systems such as the popular Zelle platform. PayPal reported earlier this month that Venmo processed $62.7 billion in volume in the first quarter, up 9% year-over-year. That amounts to more than two-thirds of all P2P volume processed by PayPal, the company-owned Xoom service, and Venmo combined.
The new teen account allows parents or legal guardians to track transactions, manage settings for privacy, and send money to their children. PayPal is also pitching the product as a means by which parents can teach kids how to handle money.
The new account is linked to a parent’s personal Venmo account, PayPal says, though the child’s friends list will be “set to private by default,” with the ability to change privacy settings restricted to parents only. The account carries no monthly fees, PayPal says, and ATM withdrawals with the associated debit card are free. The card is issued by The Bancorp Bank, based in Sioux Falls, S.D.
PayPal says it has received feedback from PayPal users that they want an account tailored for teens, though the account is not an automatic addition. Parents must sign up for it on their child’s behalf, PayPal says.
The company adds it will begin making the new account available to “select customers” next month, with wider availability “in coming weeks” after that.
PayPal and Venmo are participating in an effort mounted by Visa Inc. to enable interoperability between P2P payments services starting next year. The platform, called Visa+, was announced in April. Other early participants include DailyPay, i2c, TabaPay, and Western Union.
