A guide to mobile payment apps: What parents and teens need to know

October 18, 2023

By Zachary Ambrose • Personal Banker

Recently, payment app Venmo released its Venmo Teen Account, which allows kids as young as 13 to start sending each other money through their phones.

But while cutting out the paper cash might seem more convenient, is it really safe for kids?

In this article, we'll let you know the pros and cons associated with mobile payment platforms, and what to look for when monitoring your teen's activity.

First off ... what is a mobile payment app?

A mobile payment app links to your bank account or debit card to an App on your phone, so you can pay for things with your mobile device instead of using cash. You could use the app for:

• Sending money or receiving money from another person (called “person-to-person,” “peer-to-peer” or “p2p” payments).
• Buying something online, with just the tap of a button.
• Buying something at a participating brick-and-mortar store, with just a wave of your phone.

Digital payments can be super convenient, and keep you from having to carry cash around, which is one reason kids like to use them. But the most important rule to remember is this: 

If you send someone money using a Payment App, it's just like handing someone cash.

Tips for using mobile payments safely:

You should remember these safety tips when using a mobile payment app:

• Only use payment apps to send money to people you know (family and friends).
• Only make approved purchases from stores you trust.
• And never, ever use digital payments for items found on social media that you haven’t received yet.

It’s hard enough for grown-ups to remember some of these rules, let alone teenagers. That’s why if your child is using a payment app, you should be sure to use the standard parental oversight features, like spending alerts and controls, to stay informed about your child’s spending and to help them avoid overspending or falling victim to fraud.

Types of mobile payment apps for teens

Not all payment apps are built the same, especially when it comes to teenagers' ability to use them. Here, we'll break down some of the most popular forms of digital payments available to teens.

Paypal

Perhaps the best known of all digital payment services, Paypal has long been the go-to for online shopping. However, since someone under 18 cannot use Paypal, the service isn’t option for children.

Apple Pay (or Apple Cash)

If you have an iPhone or another Apple device, there is an option called Apple Cash Family — where as a parent or guardian, you can add family members under 18 to your own Apple Cash account. There, you can add money to children’s accounts, lock their access, approve specific transactions, and set up alerts when a transaction is made.

Apple won't let children under 18 send money to anyone outside of the Apple Family, and children under 13 can only exchange money with the family organizer. There is also a $2,000 limit per transaction or within a seven-day period.

Google Pay

Like Apple Pay, Google Pay allows you to create a Google Family account where your kids can make purchases on online apps, and you can monitor the transactions as they happen. However, unlike Apple Cash, Google Pay doesn't allow anyone under 16 to make purchases at brick-and-mortar stores; or anyone under 18 to send peer-to-peer (P2P) payments, even to people within their own family. Most payment options are limited to online apps that you or your child has downloaded on your Google or Samsung device.

Cash App

Cash App is one of the few mobile payment Apps that lets kids as young as 13 pay each other — up to $1,000 every 30 days — even to people outside of their family circle. For this reason alone, it’s important for parents and guardians to sponsor and monitor their child’s Cash App and set spending limits.

It is also a “social payment app,” which is like a cross between a social media and payment platform, and means other people can see your child’s payments on a public feed. You can change privacy settings to protect your child’s recurring purchases, locations and payments from the public feed, however, if you are concerned about your child’s privacy, you may want to consider using a different type of payment app.

Another difference is the fees — if you want to transfer your Cash App money to your bank account instantly, it will cost you a 0.5% to 1.75% fee (with a minimum of 25 cents).

Venmo Teen Account

Much like Cash App, Venmo’s Teen Account requires parents/guardians to sign up their teenagers. Once a child is signed up, they can send and receive money from other Venmo users and make purchases at participating stores (although the number of stores that accept Venmo is much smaller than Apple Pay or Google Pay). It is also a social payment platform, which makes it easy for friends to see and comment on what your child is paying for, unless you set up privacy restrictions.

Finally, just like Cash App, there will be a 1.75% instant transfer fee to access your funds right away.

Venmo vs. Google Pay vs. Apple Pay vs. Cash App

In summary, Apple Pay and Google Pay are effective ways to monitor your child’s purchases as part of a larger “family account.” They won't let children under 18 send money to a friend, but they will allow them to make purchases online, or from certain brick-and-mortar stores that accept digital forms of payment.

Meanwhile, social payment apps like Cash App and Venmo will allow more freedom to your child for sending and receiving money from friends; but they have more fees and privacy risks (since friends can see and comment on transactions unless you lock down the settings). They are also less widely used for actual store purchases.

An alternative: Just use your Banking App!

For anyone over the age of 16, all of the features offered by the mobile payment apps above are also readily available in the SNB Mobile App. There, you can:

• Send money to friends and family.
• Upload your debit card to your Mobile Wallet for contactless payments.
• Link to your children’s bank accounts for monitoring.

In addition, there are no fees and less privacy risks; along with easy ways to monitor your children’s financial activity. So if you’re looking for an alternative to mobile payment apps, consider the app already offered by your banking institution.

Of course, no payment app is completely safe. It is most important to talk to your teenagers about the potential dangers of using any payment app, and to teach them how to use digital money responsibly.

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