Venmo introduces a new account for teenagers

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What happened

Venmo payment app has introduced a Venmo teen account for consumers aged 13 to 17. Teens with these accounts will be able to send and receive money in the same way as current Venmo users. The Venmo Teen account also includes a debit card.

So

In 2022, nearly 90 million US consumers had a We come account. And the reason boils down to convenience apps like Venmo’s offering.

Now, parents can set up their teens with a Venmo account to not only give them more financial freedom, but teach them about money management from a young age. Parents will have the ability to monitor transactions on their kids’ accounts, manage privacy settings and send money to their kids.

“Venmo is a natural place for teens to learn to handle money responsibly, especially considering that 86 percent of Generation Z are interested in using an app to learn about personal finance,” said Erika Sanchez, vice president and Venmo general manager. “For parents or legal guardians, the Venmo Teen account allows them to give their teen some financial flexibility by giving them parental control and visibility into their teen’s spending habits.”

Now what

The Venmo Teen account has no monthly fees and offers fee-free withdrawals at participating ATMs. Parents will be able to monitor up to five Venmo Teen accounts from their personal Venmo accounts.

At first, the option to open a Venmo Teen account might seem appealing. But it’s important to recognize that just as payment apps can lead adults to overspend, so too can teens risk falling into a similar trap.

Imagine sending your child $100 on Venmo that is supposed to go towards back-to-school supplies. If your child spends that money at the mall, he won’t have the items he needs for school and you may have limited recourse.

Now, if your child holds down a job, they may be able to use their own money to fund their Venmo account rather than relying on yours. But even then, they could fall into the trap of keeping too high a Venmo balance when their money could instead be earning interest in a savings account.

If you plan to open a Venmo Teen account, set ground rules and spend the time teaching your child how to use it. Explain the consequences of sending money to the wrong user (ie, that you may not get it back) and encourage your child to keep their transactions private.

In fact, it’s a good idea to teach your child secure banking practices generally. These include not logging into accounts on public Wi-Fi networks, using strong passwords, and regularly monitoring accounts.

Also, make sure your child recognizes that a Venmo balance isn’t “found” or “free” money — it’s money that needs to be spent knowingly. Your teen should also monitor their Venmo balance and keep tabs on their spending, just like adults need to keep tabs on how much money they have in their Venmo and current accounts.

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