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Venmo will introduce accounts for teen users, joining Block Inc.’s Cash App and a host of other financial-services players catering to young people early in their financial lives.
Parents and guardians will be able to open accounts for children aged 13 to 17 who are looking to send and receive money, Venmo announced Monday. Teens will also get debit cards that are linked to their accounts.
Venmo plans to give parents the ability to monitor their kids’ transactions and manage privacy settings. The accounts will start rolling out in June and become “widely available in the coming weeks.”
The new accounts let parents “give some financial flexibility to their teens, while giving them parental controls and visibility into their teen’s spending habits,” Erika Sanchez, Venmo’s general manager, said in a release.
Executives at PayPal Holdings Inc.
PYPL,
which owns Venmo, have been teasing the launch of teen accounts for some time.
“From a total addressable market, when you look at 13- to 17-year-olds within the U.S., that’s 25 million new potential customers for us, so it’s significantly increasing what we can go after,” Doug Bland, the head of PayPal’s consumer business, said at the KBW Fintech Payments Conference in March, according to a transcript provided by AlphaSense/Sentieo.
“We do know about 9 million of those teens today, their parents are already Venmo customers, so think about the opportunity to now go to those existing Venmo customers and talk about providing this teen capability,” Bland continued.
Cash App, the peer-to-peer rival owned by Block
SQ,
has offered teen accounts since the end of 2021, and Block Chief Executive Amrita Ahuja said on the company’s earnings call in February 2022 that the company had seen “encouraging adoption” among a group “typically underserved by traditional financial services, obviously relying mostly on cash.”
The Venmo teen accounts will arrive at a critical time for PayPal, which has seen its shares slump 25% over the past year amid concerns about competition and growth.
Venmo represents a monetization avenue for PayPal, especially when consumers use their linked debit cards. While Venmo lets people send money to their friends for free, the company makes money through the economics of card transactions when people pay for items in the real world or online using the debit cards attached to their accounts.
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