Here's What Venmo's New Teen Debit Card Account Offers. Do You Need It?

Venmo, the Paypal (PYPL)-owned payments platform, unveiled its Venmo Teen Account, which allows parents to open a Venmo account and debit card for their teenaged kids between 13 and 17 years old. Prior to this product, neither Venmo nor Paypal allowed minors below the age of 18 to open accounts.

How Does The Venmo Teen Account Work?

The Venmo Teen Account, available to select customers starting in June, will require parents to sign up on behalf of their teenagers. Once approved, you can get a teen debit card and parents will be able to send money to their children through the Venmo app.

"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," said Venmo Vice President and General Manager Erika Sanchez.

Here are some things that you and your child can do with the new product:

Parents:

• Decide which Venmo account to link to the teen debit card
• Decide if your child gets access to the Venmo account linked to the debit card
• Monitor transactions and view transaction history for up to five teen accounts
• Manage debit card PIN, and lock or unlock debit card
• Review teen account friend list and block users from interacting with the teen account

The last set of controls on this list is particularly important. For years, Venmo was under fire over the lack of privacy protections for its accounts—especially when it came to privacy around who you were friends with on the app. That's something that the platform said it was working to improve.

Children:

• Keep track of their spending and transactions
• Send or receive money from family and friends
  

Do You and Your Kids Need Venmo's Teen Debit Card?

Venmo's new offering is not the first teen debit card on the market. There are many others, such as Greenlight, GoHenry, and even JPMorgan Chase (JPM) that offer debit cards for children in a push for financial literacy. Apple (AAPL) and Google (GOOG) also allow for family payment plans where minors can use Apple Cash or Google Play under parental supervision.

According to research firm Raddon, more than 45% of Gen Z are willing to have a conversation with an adult about personal finances, with 86% interested in using an app to learn about money management. Most Gen Z adults cite their parents and family members as sources for learning about personal finance, while up to two-thirds of Gen Z surveyed said they lack confidence in their ability to make financial decisions.

Meanwhile, more than half of parents surveyed said they’d be interested in using a financial app to help teach their children about money management.

So how do you choose the best teen debit card that works for your family? Start by looking at features and costs.

For example, the Venmo Teen Account has no monthly fees or cash withdrawal fees at certain ATMs when using the teen debit card, although a $400 daily withdrawal limit applies. On the other hand, Greenlight has a tiered service structure with the most basic teen debit card and parental control package priced at $4.99 a month.