How parents can protect teens from problems when paying with mobile apps

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As new peer-to-peer payment app options emerge for teens, experts see them as an opportunity for parents to teach their kids to use these financial tools wisely — and teach them how to avoid common pitfalls.

Venmo revealed on Monday a new teen account This allows parents to open a linked account with select features for teens aged 13-17. While some teens are already using Venmo, the app says individual account holders must be at least 18 years old (or the age of majority in their state). Terms of Use.

This isn’t the first peer-to-peer payment app to be extended to teenage users. Cash App, Square Cash, and Apple Wallet also offer features for teens, albeit under parental supervision. PayPalVenmo’s parent company, continues to require users to be at least 18 years old (or the age of majority in their state).

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The Venmo Teen Account includes a debit card and can be funded through any associated source through a parent’s Venmo Account. Parents can monitor their teens’ payments and friend requests, and control privacy settings.

“We have a zero-tolerance policy on our platform for attempted fraudulent activity, and our teams work tirelessly to protect our customers,” a PayPal spokesperson told CNBC. “We encourage customers to always be vigilant online and to contact customer service directly if they suspect they are the target of fraud.”

Apps are “convenient” but problems can be “hard to fix”.

Peer-to-peer payment apps, also known as P2P apps, are widespread across the US and are used by 64% of adults, including 81% of 18-29 year olds, according to a 2022 report consumer reports.

Teresa Murray, consumer advocate at the US Public Interest Research Group, urges caution when using P2P apps. “There are real consequences when something goes wrong,” she said.

US PIRG investigated nearly 9,300 complaints received by the Consumer Financial Protection Bureau between April 2017 and April 2021 and uncovered a pattern of issues across multiple P2P apps involving digital wallets, fraud and customer service.

Because of this, you need to transfer your Venmo balance

“People use these P2P apps because they’re convenient and easy,” Murray said. “But it’s very uncomfortable when something goes wrong.”

Almost a quarter of users have reported sending money to the wrong person, a Survey 2022 found by LendingTree.

“It’s difficult to fix and people just don’t realize it up front,” she added.

Protecting teens from common P2P payment problems

Murray also suggests only paying “people you know well” through P2P apps and asking them to send you a request through the app before making a payment for the first time. “Once you complete a transaction, it’s done,” she warned. “You won’t get your money back.”

Teens should also make transactions private, add extra authentication to access the app from their phone and be vigilant when sharing their device with others, she said. They can also stop scammers by never sharing authentication codes with third parties.

Talk to your teenagers about money

While your teen is learning about budgeting and payment apps, experts advise parents to discuss these topics at home.

“The best tip I can give is to keep communicating with your teen about money,” said board-certified financial planner Desiree Kaul of Main Street Planning in Satellite Beach, Fla. “As long as your child is comfortable asking you questions, they will always have someone to turn to when they need an answer.” How parents can protect teens from problems when paying with mobile apps

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