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Paytm has introduced ‘Pocket Money’, a feature designed to enable teenagers to conduct UPI transactions without holding their own bank accounts. Developed on the National Payments Corporation of India’s (NPCI) UPI Circle framework, the feature represents a meaningful shift in how supervised digital payments can be structured for minors within India’s rapidly evolving fintech landscape.
How It Works
The ‘Pocket Money’ feature operates through a delegated payment model, wherein parents or family members grant teenagers controlled UPI spending access linked to the parent’s own bank account. Teenagers can transact independently from their own smartphones, eliminating the need to access a parent’s device, share OTPs, or rely on QR code forwarding through messaging platforms. This independence, coupled with robust parental oversight, positions the feature as a practical and secure solution for everyday adolescent spending.
Transaction limits have been thoughtfully structured to balance freedom with responsibility. Individual payments are capped at ₹5,000, while the cumulative monthly spending ceiling stands at ₹15,000 across the UPI network. Additional safeguards include a ₹500 transaction limit during the first 30 minutes following setup and a ₹5,000 cap within the initial 24 hours, ensuring a cautious onboarding experience.
Practical Use Cases
The feature is tailored to meet the routine financial needs of teenagers, covering payments at school and college canteens, metro and cab rides, mobile recharges, and everyday shopping. However, international transactions and cash withdrawals remain outside its scope, maintaining appropriate boundaries for the target age group.
Parental Controls and Transparency
Parents retain full authority over the feature. Spending limits can be adjusted or access revoked at any time through the Paytm UPI PIN. Integration with Paytm’s existing ‘Spend Summary’ tool further allows families to categorise and review transactions, supporting informed financial conversations between parents and teenagers.
A Competitive Edge in Teen Fintech
Earlier entrants in the teen focused fintech segment, including FamPay, Akudo, and Muvin, had previously relied on prepaid card and co-branded PPI-based UPI arrangements. However, regulatory restrictions by the Reserve Bank of India impacted several of these models. By building directly on the UPI Circle framework, Paytm sidesteps those limitations while offering a more integrated and scalable solution.
‘Pocket Money’ is currently available on the latest versions of the Paytm app for both Android and iOS devices.
