Venmo Introduces New Teen Account

What happened

Payment app Venmo has introduced a Venmo Teen Account for consumers aged 13 to 17. Teens with these accounts will be able to send and receive money the same way current Venmo users do. The Venmo Teen Account also comes with a debit card. 

So what

As of 2022, almost 90 million U.S. consumers had a Venmo account. And the reason boils down to the convenience apps like Venmo offer. 

Now, parents can set their teens up 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 teens' accounts, manage privacy settings, and send money to their teens. 

"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, Venmo. "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."

Now what

The Venmo Teen Account comes with 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 payments apps can lead adults to overspend, so too do teens risk falling into a similar trap.

Imagine you send your teen $100 on Venmo that's supposed to be earmarked for back-to-school supplies. If your teen blows that money at the mall, they won't have the items they need for school, and you might have limited recourse.

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

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

In fact, it's a good idea to teach your teen safe banking practices in general. These include not accessing accounts on public Wi-Fi networks, using strong passwords, and monitoring accounts regularly.

Also, make sure your teen recognizes that a Venmo balance isn't "found" or "free" money -- it's money that needs to be spent mindfully. Your teen should also monitor their Venmo balance and keep tabs on their spending, just as adults need to keep tabs on how much money they have in their own Venmo and checking accounts.