PayPal has developed a student program that allows parents
to create a sub-account for their children that they can monitor and send money
to.
When finances are needed, parents deposit monies into the
sub-account on a one-time or ongoing basis, with children only able to spend
what is in it.
The account also includes a debit MasterCard that may be
used in stores and at ATMs.
Money can be moved online or via mobile phones, and parents
and kids can use their phones to check account balances. Parents can also
receive alerts when their children's payments hit a set threshold or when a
certain low balance is reached.
According to Don Fotsch, VP of PayPal's user experience and
design, the account allows parents to give their children limited financial
freedom and independence so that they may learn to manage their own money
properly.
In the year 2000, Visa introduced the Visa Buxx pre-paid
card for teen spending. Major banks, such as Citi and BofA, have also launched
similar initiatives.
