PayPal is one of the most widely accepted online payment methods, but you have to be 18 to create an account. This means that young people have limited options for making purchases online, even though most retailers have online stores, and some are online-only. Here are some PayPal alternatives for those under 18.
Related: Talking about different ways to pay, Teaching teens about money management
Here's our list of the best PayPal alternatives for under 18s:
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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
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.
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. This is because PayPal is a financial service, and 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.
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. They can also ask a parent or guardian to open a PayPal account for them and then allow them to use it with their permission.
Alternatives to PayPal for kids & teenagers
Luckily, other alternatives let your child make online purchases. Before you help your teen make online purchases, consider discussing online safety, including how to spot real payment websites and how to avoid online scams.
Once you feel your teen is ready, these methods can be used to help them have the freedom of online purchasing.
Related: Online safety for teens
Prepaid debit cards
Prepaid debit cards are one of the safest ways for teens to pay for items online. 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.
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 cannot accidentally overspend and fall into overdraft.
If you opt for a GoHenry prepaid 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 the 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?
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 an extra helping hand from you.
Prepaid accounts are 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 to make purchases in stores, online, and in apps. You need to add your credit or debit card to your Google Pay account to do this. 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 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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