Finance, Venmo has announced that teenagers will officially be granted permission to open an account on their platform, provided they have their parents’ consent. This decision will extend the reach of the widely-used social payments app to a younger demographic that is expected to quickly embrace its functionality.
While the prospect of using Venmo may not be entirely new for many teenagers, as parents often create accounts for their children through their own profiles, such actions technically violate Venmo’s terms of service. In fact, there have been online guides available for some time, instructing parents on how to create a child’s account without facing penalties from Venmo.
Having amassed a user base of over 90 million individuals, Venmo has long been a favored means of sending money between individuals. The introduction of this teen-oriented feature arrives at a time when politicians and regulators are keeping a close eye on various social apps. For instance, TikTok was recently banned in the state of Montana, and other states are contemplating similar actions.
Allowing teenagers to access Venmo represents a substantial market expansion for the platform. According to company executives’ estimates in March, granting teenagers the ability to open Venmo accounts could potentially attract 25 million new customers. The company approximated that around 9 million teenagers were already utilizing Venmo through their parents’ accounts.
Who can get a Venmo Teen Account?
The Venmo Teen Account is designed for individuals between the ages of 13 and 17 and includes a debit card. Parents will have the ability to oversee transactions, customize privacy settings, and transfer funds to their teenager. They can also lock or unlock the debit card and view the recipients and senders of their teenager’s money transfers.
When using the debit card to withdraw cash from ATMs, there will be a daily limit of $400, and users must utilize participating ATMs to avoid a $2.50 fee. However, there are no charges associated with creating or maintaining the account.
Parents will have the capability to monitor up to five Venmo accounts linked to teenagers. While traditional banks have offered children’s bank account products for many years, the emergence of e-commerce and financial technology companies has rendered a basic checking account insufficient for today’s teenagers.
Why is Venmo creating teen accounts?
Venmo’s decision to introduce teen accounts stems from the consistent demand expressed by users over the years. This move acknowledges the likelihood that teenagers were already utilizing the service. By offering dedicated teen accounts, Venmo aims to provide enhanced security measures, identity verification, and the added benefit of accessing a debit card.
In comparison, Chase offers its Chase First Banking product, which can be opened for children as young as 6 years old, along with a high school checking product. Both of these offerings include a debit card and features that allow parents to monitor account spending. The high school checking product goes a step further by granting access to Zelle, the bank’s peer-to-peer payment service, as well as credit monitoring services.