PayPal is one of the most widely accepted online payment methods, but you must be 18 to create an account. This means that teens have limited options for making purchases online. Here are some PayPal alternatives for those under 18.
Related: What age can you get a debit card?
A quick overview of PayPal
PayPal is an online payment system that enables individuals and businesses to send and receive money online. It’s a convenient and secure way to send and receive money, so it’s a popular payment method for online shopping, but it can also be used to send money to friends and family.
To use PayPal, you need to create an account and link it to a bank or credit card. Once your account is set up, you can send and receive money using your PayPal email address.
When you send money using PayPal, the recipient does not need to have a PayPal account. They can simply enter their email address, and PayPal will send them a link to claim the money.
When you receive money using PayPal, it is deposited into your PayPal balance. You can then withdraw the money to your bank account or credit card or use it to pay for goods and services online.
How old do you have to be to have Paypal?
You have to be 18 to register for a PayPal account. If PayPal discovers you're a minor with an account, it will close the account.
Under 18s can use the PayPal account of one of their parents, with permission.
Why does PayPal have a minimum age?
PayPal has a minimum age because it is a financial services company. In order to use a financial service, you must be able to enter into a legally binding contract. People under the age of 18 cannot enter into a legally binding contract in the UK.
PayPal is responsible for protecting its users from fraud and other financial risks, which is another reason why PayPal has a minimum age.
What happens if you open a PayPal account when you’re under 18?
If your teen opens a PayPal account under 18, PayPal will close the account. There are other payment methods that teens and kids can use. For example, they can use a prepaid kids debit card or a teen debit card.
Can parents create a PayPal account for their kids and teens?
Teens can use a parent’s PayPal account with their permission. However, parents cannot open a PayPal account for any under 18.
If you do decide to let your teen use your PayPal account, it is important to set some ground rules.
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Set spending limits.
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Require your teen to get your permission before making any purchases.
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Monitor their transactions regularly.
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Talk to your teen about the risks of online shopping and identity theft.
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Ensure that your teen is aware of PayPal's terms of service and that they agree to abide by them.
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Use a strong password and enable two-factor authentication.
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Be careful about clicking on links in emails or messages from unknown senders.
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Regularly review your PayPal account statements for any unauthorized charges.
Does PayPal Offer a PayPal Student Account?
Student Paypal accounts used to allow a parent to manage their teenager's account, but then the student could use that account like a normal PayPal account. However, these accounts were closed in 2016 and no longer exist.
PayPal alternatives for under 18s
Luckily, other alternatives let your child make online purchases. Before you help your kids and teens make online purchases, consider discussing online safety, including how to spot real payment websites and how to avoid online scams. Once you feel your kids are ready, these methods can be used to help them have the freedom of online purchasing.
Related: Online safety for teens
Paypal alternatives for kids and teens under 18:
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Prepaid debit cards
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Credit cards for teens
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Online bank accounts for teens
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Payment transfer apps
Prepaid debit cards for kids and teens
Prepaid debit cards are one of the safest ways for teens to pay for items online. A prepaid debit card works much like a gift card, but it can be used anywhere, online or offline, with Apple Pay if your child is 13 and Google Pay if your child is 16. (Depending on your prepaid debit card provider)
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. Money is put on the card, and when that has been spent, the card can be topped up. This ensures they can’t accidentally overspend and fall into overdraft.
If you opt for a GoHenry prepaid teen 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.
A prepaid debit card has another big advantage – children can have it from age six upwards, far younger than a standard debit card. Giving your child a GoHenry prepaid debit card at an early age is key to their financial education, as research from Cambridge University shows that by the age of seven, most children will be ready to learn more as they have grasped how to recognise the value of money and to count it out. They will also understand that money can be exchanged for goods by this age.
A good financial education could double your child's earning power in later life. That's why GoHenry also offers the in-app Money Missions – fun videos and quizzes to help your children learn about finances. For every stage of their journey, there's a bite-sized skill to learn, from saving to budgeting and investing.
Related: What age can you get a debit card? Should my teen have a debit card? Go cashless with GoHenry today!
Credit cards for teens
Teenagers can only apply for a credit card once they are 18. 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
Paying from your bank account is another way to pay for items online. The minimum age for opening a bank account is 13, though some banks offer accounts to 11 and 12-year-olds if they have permission from their guardian.
Opening a bank account for your child is another option. The scope of what kind of children's accounts are available is broader than you think and includes savings accounts, instant access accounts, Junior ISAs, and accounts that come with ATM and debit cards for those aged 11 and over.
It's important to make sure that your child has the opportunity to learn about finances as soon as they start showing an interest. If they are too young for a bank account, a kids' prepaid card will give your child all the benefits of an account but with your helping hand.
Prepaid accounts are also excellent for younger kids who need more guidance with their spending habits but are also suitable for teens as they give them more control over their budgeting, saving and spending.
Payment transfer apps
A payment transfer app or a digital wallet is another way to make online payments. It uses your smartphone or another device to enable you to make purchases or even send money to friends and family.
To use a payment transfer app or a digital wallet, you need to create an account and add your payment information. Once you've done that, you can use your phone to scan a QR code or enter a merchant's email address or phone number to make a payment.
Cash App
A cash app is a mobile payment service that allows users to send and receive money quickly and easily. Cash App is a mobile payment service available in the United States and the UK that allows users to transfer money to one another using a mobile phone app.
Apple Wallet
Apple Wallet is a digital wallet developed by Apple that allows users to store Wallet passes, including credit cards, debit cards, and prepaid cards, for use via Apple Pay. It can be used by anyone 13 and over and is a convenient way to make payments online and in apps. It is also a secure way to store your payment information and other important documents. To make a payment online, add your cards to Apple Pay, then select Apple Pay as your payment method at checkout and enter your Apple ID password to confirm the payment.
Google Pay
Google Pay can be used by anyone 16 and over (though not with the GoHenry card) to make purchases in stores, online, and in apps. To do this, you need to add your credit or debit card to your Google Pay account. Your payment information is encrypted when you use Google Pay. Google Pay also uses fraud detection and prevention measures to protect your account.
How GoHenry can help
Focusing on your child's financial education around how they spend online and with bank accounts, savings accounts and prepaid cards ties into our research, conducted in partnership with Censuswide and Development Economics, that shows of those who are earning between £55,001 and £65,000 per year, 77% of them received financial education as a child.
GoHenry can help because it offers a way for children to get involved in the digital economy safely and securely overseen by parents. You only need to pay pocket money onto the prepaid card each week and then set limits around online and weekly spending. Your child can then use their kids debit card online and in-store, and you will get instant notifications every time they purchase something. Alongside this, the app comes with Money Missions designed to make every child smart with money, with bite-sized lessons on everything from budgeting to saving and investing.
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