PayPal has launched a Venmo Teen Account, allowing parents to open accounts for kids aged 13 to 17. With an account, teens can send and receive money through the app and get a Venmo Teen Debit Card. Many teens currently use Venmo but set up the account through their parents, although that is against the terms of service – or through some other sort of workaround. The company estimates that 9 million teenagers were using Venmo against the company’s TOS through their parents and that this additionally opens up roughly 25 million potential new customers. PayPal says the aim is to teach teens about money management through the Venmo app. At the same time, parents can monitor transactions, manage privacy settings, and educate their teens about responsible financial habits. I’m sure the recent government scrutiny of social media aimed at teens influenced this move to some extent. Having the oversight of the account tied to a parent account protects PayPal from putting kids and their money at risk when operating in a non-sanctioned account.
I like the teen account concept, as kids get the empowerment of having their own card/account but are less likely to be victims of fraud or have hidden transactions that could put them at risk. Since parents sign up for the Venmo Teen Account and manage it through their own Venmo account, they can utilize parental controls and have visibility into spending and peer-to-peer (P2P)payments. PayPal also offers many other financial services, including a Venmo credit card and Venmo business accounts, so the company is wise to set up services that will keep teens engaged with the brand when they age out of the Teen Debit Card.
Many traditional banks have teen accounts that can be tied to a parent’s account, but they lack the social P2P interaction teens enjoy with Venmo. I do not understand why people want others to see whom they send money to. However, the private setting allows for the payment only to be seen between sender and recipient.
The Venmo Teen Account is available now for some customers and will become more widely available in the coming weeks.