NEW YORK (AP) — Teenagers will officially be allowed to open a Venmo account with their parent's permission, the company said Monday, expanding the popular social payments app to an age demographic that is likely to embrace it almost immediately.
Using Venmo won't necessarily be new to a good number of teens — parents often set up accounts for their children through their own accounts, which is a violation of Venmo's terms of service. There have been guides on the Internet for some time showing parents how to create a child's account without Venmo penalizing them.
Venmo has been a popular way to send money to individuals for years, and now has more than 90 million users. The product for teens comes at a time when other social apps are being watched closely by politicians and regulators. The state of Montana banned TikTok last week and other states are considering a ban as well.
Opening up Venmo to teenagers will be a significant expansion of Venmo's market. Company executives in March estimated that a Venmo account for teenagers could create 25 million potential new customers. The company estimated that 9 million teenagers were using Venmo through their parents.
The Venmo Teen Account will be available for 13- to 17-year-olds and comes with a debit card as well. Parents will be able to monitor transactions, adjust privacy settings as well as move money to their teenager. Parents will also be able to lock and unlock the debit card and see who the teenager is sending money to and receiving it from.
Withdrawals from ATMs using the debit card will have a $400 daily limit and users will need to withdraw money from participating ATMs or incur a $2.50 fee. Otherwise there are no fees attached to creating or maintaining the account.
Parents will be able to monitor up to five Venmo accounts for teenagers.
Banks have been creating children's bank account products for decades, but with the rise in e-commerce and financial technology companies, a basic checking account for a teenager no longer suffices.
Venmo acknowledged that opening the service to teenagers was done in response to frequent requests from users over the years, a nod to the fact that teenagers were likely using the service already. The mainstream accounts provide the teenagers more security and identity verification, and also give them access to the debit card.
Chase offers its Chase First Banking product which can be opened for children as young as six years old as well as a high school checking product. Both products come with a debit card and ways for parents to monitor spending on the account. The high school checking also gives access to Zelle, the bank's own peer-to-peer payment service, as well as credit monitoring services.