Rather than carrying cash or even using a debit card, many teens rely on peer-to-peer payment apps to conduct many of their financial transactions. These apps are convenient and easy to use, but they can also cause financial distress if something goes wrong. These tips will help you help your teen use peer-to-peer payment apps safely.
Choose the Right App
Although peer-to-peer payment apps are supposed to be restricted to users 18 and older, clever kids can get around these barriers. But there are apps, Like Apple Pay and Venmo, that have versions specifically designed for kids 12 and under and teens 13-17. They are linked to a parents’ account, so there’s parental control and oversight over how much kids can spend and how they’re using the apps.
Be sure to supervise which apps they choose to download to ensure they’ve chosen the authentic versions. Not something designed for phishing and illicit data collection.
Keep it Updated
Once you and your child have chosen the app they’ll use, make sure they know to keep it updated to the most current version. It will be easiest to set apps to update automatically. And the same goes for the phone’s overall operating system. Stay on top of software updates to ensure the phone is operating with the most up-to-date security features. (By the way, all these rules apply to parents’ phones, too).
Make it a Teaching Moment
Before you allow your child to start using a peer-to-peer payment app, set ground rules and expectations for how they are (and aren’t) allowed to use it. Will there be a spending limit? Can they use it whenever they need to, or do they need to check in with you first? Are there consequences for using it for unapproved transactions?
It’s up to you to decide the specifics for the rules and how to enforce them, but using payment apps is a great opportunity to talk to kids about basic money management principles.
Emphasize Security
A recent survey from Lending Tree shows almost a quarter of users have mistakenly sent money to the wrong person or business when using a peer-to-peer payment app. When that happens, it can be difficult, if not impossible, to recover those funds. And trying to connect with customer service for these apps can be challenging.
Make sure kids know that using these apps comes with the responsibility to keep their phone secure. No more passing it around for selfies or letting a friend scroll their photos. They should know where it is at all times. Also be sure they know not share passwords or respond to any texts claiming the payment app needs additional information. Tell them if they have any questions or think their phone or the app has been compromised in any way, they can come to you.
Talk About Other Financial Services
While peer-to-peer payment apps will continue to grow in popularity, they aren’t the be-all-end-all in financial products. When you’re talking with your kids about the apps, include other financial topics like savings accounts, checking accounts, loans — including credit cards. Explain what they are, what they’re used for and why they’re important. A well-rounded financial education includes an understanding of both new and traditional products and services.
