Need to Know
- Venmo is tapping into a new market by prototyping a service that gives parents the ability to create spending accounts attached to limited-privilege debit cards for their teenage children.
- A code revealing a “delegate card” was found hidden in Venmo’s Android coding through reverse engineering.
- Should the pilot materialize, Venmo will join Greenlight, Step, Kard, Revolt, and industry frontrunner Current in offering flexible financial options for teens.
- A 2019 poll by creditcards.com found that six million American parents have at least one child with their own credit card.
Digitizing allowance is by no means a new concept, but Venmo’s potential venture into the category currently dominated by Current provides the P2P platform a seat at the youth-focused banking table and perhaps more importantly, gives adults more reason to sign up for Venmo.
Tech Crunch reported that the new card experiments were uncovered by reverse engineering specialist Jane Manchun Wong and would potentially allow parents to set spending notifications and limits all the while giving kids more flexibility in urgent situations. The card would be connected to the “parent” debit account and come with limited privileges.
A recent poll found that six million US parents have at least one child with their own credit card. Interestingly, 21% of parents who have credit cards said their children have used them without their permission at least once, bringing to light the topic of teaching children financial literacy with offerings such as Venmo’s experimental teen debit card.
Venmo is not the first company to seek opportunities in the debit card market. Startups Greenlight and Step both allow parents to manage teen spending on specific debit cards for them even going so far as giving parents the options to choose the exact stores where the cards can be used. Current, which offers a very similar user experience to what Venmo is testing has over 500,000 accounts and is seen as the startup to beat in the youth banking space.
Financial literacy aside, Venmo’s new card gives parents more reason to open accounts and add more savings—savings that the PayPal owned company earns interest on.