Kids & Cash Apps: What Parents Need to Know | McAfee Blog

Fewer people carry cash these days, kids included. This growing paperless reality fast-forwards the parenting task of educating kids on financial responsibility. As of 2021, most cash apps allow kids 13 and up to open accounts (previously, the age was 18). Kids can also get a cash app debit card for retail purchases. But while cash apps are a popular and convenient tool, they come with some risks families should consider.  

Instant Transactions 

Cash apps allow kids to exchange money with friends directly from a secondary established account, much like handing another person cash. Cash apps have become a popular tool with kids and an easy way to split costs or pay someone for a purchase. Cash apps also come in handy for families and allow parents to instantly send their children money for daily expenses such as school or sports fees, meals, purchases, or entertainment. Some common cash apps include Venmo, Zelle, Cash App (Square), Pay Pal, Zelle, and Facebook Pay, among others.   

Some Risk 

Sounds awesome right? But with ease comes risk. Most money transfer app funds are not FDIC insured. That means if your child (or you) accidentally sends money to an unintended recipient, they may have a tough time recovering those funds.  

Every app comes with some degree of risk. While the leading cash apps are considered secure and can be used with little concern, there’s always the potential of a cyber crook finding a security loophole that exposes your money, banking information, and identity.  

10 Cash App Safety Tips for Families 

1. Discuss the risks. Clicks within a cash transfer app equal real cash. Help your kids understand digital money is equal to actual dollars. Take the time to discuss current scams and how to practice extra care when using cash apps.  
2. Use safeguards. Using security best practices is not a skill that comes naturally to most people. It’s something that must be practiced and improved constantly. Just like computers, mobile devices can be infected with viruses and malware. One way to protect mobile devices (and cash apps) is to subscribe to a mobile antivirus product, such as McAfee Mobile Security, which includes safe browsing, scanning for malicious apps, and locating your device if it is lost or stolen.  
3. Layer up app security. In addition to an antivirus tool, guide your kids in how to add additional security to their cash apps. Guide them in how to follow password security protocols and how to add protection in the form of a PIN code, facial ID, or fingerprint ID. While you are at it, make sure your child locks their device in the same way. These steps offer more protection in case your child’s phone is stolen or lost, and a stranger attempts to use the cash app.  
4. Slow down and verify. As fast as kids’ fingers move on keypads, advise your child to slow down and verify spelling and a recipient’s account address when using a cash app. Most cash app providers will not help users recover misdirected funds. One typo or clicking on the wrong Jake Williams in the recipient list can cost you or your child big bucks.  
5. Only connect with friends. When using cash apps, advise kids to only exchange money with people they know. Scammers have been known to befriend minors only to ask for a loan or offer goods or services. Once the payment is sent, the scammer instantly deletes their accounts and is gone without a trace.  
6. Stay on top of cash app scams. Check BBB Scam Tracker to see how bad actors are targeting cash app users. In searching cash app scams on this site, consider reading the personal stories (click “details” of each reported scam) of the people who have been victimized. This might be a very effective way to converse with your kids about the natural consequences of online scams.  
7. Safeguard personal data. Remind kids not to share their email, address, or other information. Also, avoid clicking pop-up ads, trendy quizzes, and random website URLs designed to plant malware on a device that steals bits and pieces of personal info that can be used for various attacks, including financial and identity theft.  
8. Link your app with a credit card. If possible, consider linking your child’s cash app to a credit card rather than a bank account. Debit cards remove cash from an account instantly, but credit cards offer consumer protection in cases of fraudulent transactions. The one drawback is that a credit card company will charge interest on your balance.  
9. Keep app balances low. Cyber crooks can’t steal funds that aren’t there. For that reason, it’s wise to keep balances low in your child’s cash app account.  
10. Teach financial literacy basics. The cash app conversation is an excellent opportunity to begin or expand your family’s conversation on financial literacy. Here are several helpful resources that will help you teach your kids financial literacy at any age.     

The use of cash apps is here to stay and, no doubt, an integral part of the overall paperless fast track we’re all on. Guiding kids into this realm equipped with knowledge and confidence is a powerful way parents can help kids enjoy the responsibility of money without falling prey to digital risks.