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.