PayPal is one of the most widely accepted online payment methods, but those who are under 18 years can’t sign up for PayPal accounts. This means minors have limited options for making purchases online, even though most retailers have online stores, and some are online only.
Here's our list of the best PayPal alternatives for under 18s:
- Prepaid debit cards
- Credit cards for teens
- Online bank accounts for teens
- Payment transfer apps
How old do you have to be to have Paypal?
PayPal has age restrictions that mean anyone under 18 is unable to register for an account. This is due to legal reasons – in order to agree to the PayPal legal agreement, the user has to be 18 years old or older.
Parents know their children best, but it’s generally not recommended to let children have full access to your PayPal account as they could make purchases without your agreement or knowledge. This is why we suggest PayPal alternatives for minors.
What happens if you open a PayPal account when you’re under 18?
Opening a PayPal account if you are under 18 can get you in trouble, as it violates the User Agreement.
PayPal can take several actions against you if you engage in restricted activities, such as terminating your agreement or holding your balance for up to 180 days.
Having an account if you're not of legal age may seem like a small risk, but it can have unintended consequences down the road, including losing access to your funds and potentially facing legal action.
Alternatives to PayPal for minors
Luckily, there are alternatives that let minors make online purchases. But before you help your teen find a way to do this, you might want to discuss online safety, including how to spot real payment websites and how to avoid online scams.
Once you feel that your teen is ready, these PayPal alternatives can be used to help them have the freedom of online purchasing.
Prepaid debit cards
Prepaid debit cards are one of the safest ways for teens to get a debit card of their own. A prepaid debit card works a lot like a gift card, but it can be used anywhere, online or offline, and with Apple Pay, if your child is 13 and Google Pay if your child is 16.
Money can be put on the card; when that has been spent, the card needs to be topped up before it can be used again. This is very helpful to make sure that teens cannot accidentally overspend, and there’s a low risk of going into an overdraft.
If you are unsure whether your teen should have a debit card, a prepaid debit card is a safe and simple way to help them learn how to manage their money.
If you opt for a Acorns Early debit card, you can also use parental controls to monitor spending, track purchases, and get notified when your teens use their card. You can also set spending limits to decide where and how much they can spend.
Credit cards for teens
Minors cannot apply for a credit card until they are 18. This means that, generally, a credit card has the same limitations as PayPal. Some credit card providers will let you add a younger teen to your credit card, but getting your teen a prepaid debit card gives them a chance to be more financially independent and participate in the digital economy.
Online bank accounts for kids and teens
Getting an online bank account for teens can also be a good idea as it can teach them financial responsibility and enable them to learn money management skills. Research shows that 80% of US adults who didn't have financial education have faced financial difficulties, including being unsure how to pay off debts, paying higher interest rates than average, or avoiding investing due to a lack of understanding.
With an online bank account, they can monitor their expenses, deposits, and withdrawals. Unlike pre-paid cards, online banks often offer low or no fees, high-interest savings accounts, and other incentives for minors, making them cost-effective. The minimum age to open a bank account in the US, however, varies by state and financial institution, but generally, a person must be at least 18 years old to open a bank account on their own. However, some banks offer accounts for minors with parental consent, which may have different age requirements.
Be aware, though, that bank accounts often do not have all the features that you would find with a prepaid card, such as parental controls and the ability to set limits and spending boundaries.
Payment transfer apps
A payment transfer app is a mobile app that allows users to send and receive money. These apps typically use bank accounts or debit cards to process payments, and they often offer features such as instant transfers, low fees, and the ability to send money to friends and family without having their bank account information.
Cash App
Cash App is a mobile payment service developed by Block, Inc. that allows users to send, receive, and spend money. To use Cash App, users create an account and link a debit card or bank account. Once an account is created, users can send and receive money from other Cash App users. They can also use Cash App to make purchases at select merchants. To add a minor aged 13 to 18 to your Cash App account, a parent or guardian over the age of 18 will need to set up their own account as a legal owner and approve their teen to join the account.
Apple Wallet and Apple Cash Family
Apple Cash Family is a feature of the Apple Pay and Apple Wallet system. Parents can set up an Apple Cash account for their children, which gives them oversight of their kids’ money within the account.
Apple Wallet is also available to those under 18s, but there are some restrictions on what those under 18s can do with Apple Wallet. For example, teens and minors cannot add a credit or debit card to Apple Wallet. They can only add a prepaid card or Apple Cash to Apple Wallet.
Google Pay
Minors as young as 13 can use Google Pay by having their parents add them as a payment method to their accounts.
Overall, Google Pay is a safe and convenient way for minors to send and receive money. It is a great way for parents to teach their children about money management and financial responsibility.
How Acorns Early can help
Acorns Early is a prepaid debit card and financial education app for children aged 6 to 18. It allows kids and teens to enjoy financial independence in-store and online and gives parents the ability to set limits and oversee spending activity, Acorns Early's in-app Money Missions has engaging lessons tailored to the age of your kids, including bite-sized lessons and videos for every age and more advanced topics for kids aged 12+. Overall, it’s a convenient and secure way for kids and teens to receive and spend money.
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