Paytm Launches Pocket Money Feature For Teenagers Without Accounts

Paytm Introduces UPI Payments For Teenagers

Paytm has launched a new feature called ‘Pocket Money’ that allows teenagers to make UPI payments without requiring their own bank accounts. The feature is built on the National Payments Corporation of India (NPCI)’s UPI Circle framework and aims to provide supervised digital payment access for minors.

The new service allows parents and family members to delegate controlled spending access to teenagers through the Paytm app while maintaining visibility and control over transactions.

According to the company, teenagers can use the feature for everyday payments including school and college canteens, metro rides, cab bookings, mobile recharges and shopping purchases.

Parents Can Set Spending Limits And Monitor Transactions

Paytm said the feature has been designed with multiple parental control and security mechanisms. Parents can set monthly spending limits, track transactions in real time and revoke access whenever required using their Paytm UPI PIN.

Under NPCI guidelines, individual transactions through the feature are capped at Rs 5,000, while the total monthly transaction limit across the UPI network is restricted to Rs 15,000.

The service currently supports savings and current accounts, while international payments and cash withdrawals are not permitted.

One of the key highlights of the feature is that teenagers can make payments directly through their own smartphones without needing access to their parents’ devices, OTP approvals or QR-code sharing on messaging platforms.

Paytm Expands Teen-Focused Fintech Offerings

Paytm has also integrated the Pocket Money feature with its Spend Summary tool, allowing families to categorise expenses and better track spending habits and allowances.

To improve security, Paytm has added multiple safeguards during the onboarding process. Transactions are limited to Rs 500 during the first 30 minutes after setup, while a Rs 5,000 cap applies during the first 24 hours. Device lock activation is also mandatory for using the feature.

The launch comes at a time when fintech companies are increasingly targeting younger users with supervised spending products. Startups such as Fam, Walrus and Junio had earlier introduced prepaid card based solutions for minors.

However, several fintech startups faced challenges after the Reserve Bank of India restricted certain co-branded prepaid payment instrument (PPI)-based UPI arrangements.

Unlike earlier models, Paytm’s Pocket Money feature is directly integrated with NPCI’s UPI Circle infrastructure, allowing delegated UPI payments without requiring teenagers to open independent bank accounts.