Venmo targets young consumers and parents with new teen accounts and debit card
Venmo announced today that it's introducing teen accounts, allowing parents and legal guardians to open a Venmo account for their teenagers so they can send and receive money. The account, which has no monthly fees, also comes with a Venmo Teen Debit Card. Each Venmo Teen Account is connected to and managed by a parent’s personal Venmo account, but the teen account has a separate balance from the parent’s account.
The Venmo Teen Account allows parents to monitor transactions, manage privacy settings and send money to their teen. Teens can track their own spending in the Venmo app and may be eligible to receive direct deposits, enabling funds to be paid directly into the Venmo Teen Account from an after-school job, for example.
Parents can choose whether to grant their teens access to the Venmo app. They can view the Venmo Teen Account's balance and transaction history, manage the Teen Debit Card’s PIN, lock and unlock the debit card, review their friends list and block users from interacting with the account. Parents can monitor up to five Venmo Teen Accounts from their personal Venmo account. Although parents can't block their teens' payments, they are automatically alerted to them.
It's worth noting that teens can't access some of the features that come with a standard Venmo account, such as crypto. Venmo says it doesn't currently plan to add any additional functionality for teen accounts, such as savings accounts or budgeting tools.
“Venmo is a natural place for teens to learn how to engage with money responsibly, especially considering 86% of Gen Z are interested in using an app to learn about personal finance,” said Erika Sanchez, vice president and general manager at Venmo, in a statement. “For parents or legal guardians, the Venmo Teen Account allows them to give some financial flexibility to their teens, while giving them parental controls and visibility into their teen’s spending habits."
Image Credits: Venmo
The company says research shows that more than 45% of Gen Z prefer to have a conversation with an adult to learn about personal finance, and over 50% of parents are interested in using an app to help their children learn about money management. Venmo says the Teen Debit Card and Venmo Teen Account can help parents and their teens build money management skills together.
To get started, parents must sign up for a Venmo Teen Account on their teen’s behalf. They can do so by navigating to the "Me" screen in the Venmo app, tapping their name in the top left-hand corner, then selecting “Create a teen account” from the drop-down menu. Parents can select a Teen Debit Card color, and enter information about their teen, like their name, date of birth and address.
It's worth noting that Venmo appears to have been planning this launch for quite some time. Back in 2020, Venmo was spotted prototyping a new feature that would allow adult users to open a debit card for their teenagers that was connected to their account.
By delving into teen banking, the company can establish a new reason for adults to sign up for Venmo. The service is already a popular way for younger people to split the bill for things like Uber rides or dinner, so it make sense for the company to bring social banking to a teen demographic. However, Venmo is late to the teen debit card market. Startups like Greenlight and Step let parents manage teen spending on dedicated debit cards.
The Venmo Teen Account is rolling out to select customers next month and will be widely available in the coming weeks.