Merchant Innovation

Venmo App Lets Parents Create Debit Card For Kids

Venmo will introduce a new debit card for kids.

Venmo is branching out to target a new demographic in its payments service: teenagers, according to published reports on Monday (Feb. 24).

A new proposed service by the payments provider would let parents create spending accounts attached to debit cards for their teenage children, giving them more flexibility in spending at an early age, as opposed to just handing them a few dollars. It would also allow parents to set spending limits in a new way.

The new service may give adults a new reason to sign up for Venmo and could get them more savings in Venmo debit accounts. In the latter case, the company would earn interest on the cash. The program could drive purchase frequency, racking up fees for Venmo parent PayPal.

There isn’t a wealth of information about the new program yet, but a tip to tech website TechCrunch by reverse engineering specialist Jane Manchun Wong found evidence: hidden in Venmo’s Android program is code revealing a “delegate card” feature, letting users create a debit card that is connected to their account with limited privileges.

Venmo is not the first company to inch in on the debit card market. Competitors like Greenlight and Step allow parents to manage teen spending on specific debit cards for them. And other companies like Kard and Revolut have also announced plans to try the new business model.

Venmo’s prototype idea uses a system similar to that employed by Current, a leader in the children’s banking arena. Current has over 500,000 accounts and raised a $20 million Series B last year.

The idea of introducing children into the banking space could pair well with another recent Venmo innovation, as it introduced a set of custom animated stickers that users could include along with payments. Some of the stickers include animated coin jars, signs advertising dinners and other foods to symbolize what was paid for and symbols of affection.

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

TRENDING RIGHT NOW