Cash App targets a new type of customer: children aged 6 to 12 years

Tech companies are always looking for new customers, and Cash App, the fintech company owned by Jack Dorsey’s Block, believes it has found a promising new demographic: kids.

The company, which already offers financial services to teenagers, said this week it is expanding its youth-focused services in an effort to build a relationship with Gen Alpha and the upcoming generation of teenagers in the US.

The new scheme will allow parents to set up financial accounts for children between the ages of six and 12. Children will not have access to the app and these accounts will be managed by their parents, who will be able to deposit and track money. Kids, meanwhile, will get a debit card linked to their accounts that they can use to spend the money.

The accounts can also receive P2P payments from a small number of approved users (such as grandparents) and will be eligible to earn up to 3.25% in interest, the company says.

The idea is to teach kids about financial responsibility, according to Kristen Anderson, group product lead for Core Networks at Cash App. “Cash App has been serving teen accounts for many years, and we’ve seen through our customer base that there’s just that desire to be able to get kids into the experience earlier,” Anderson told TechCrunch.

Anderson described the new facility as a way for kids to “learn about savings and savings goals,” combined with feature “allowance” of the applicationwhich allows parents to schedule automated transfers to their child’s account.

Tuesday’s announcement also notes that children can “graduate” to their own Cash App accounts once they turn 13, with a parent’s approval. Once a user turns 13, they can gain access to wider range of Cash App services, which includes buying and selling bitcoins and even trading stocks. These activities must be monitored and approved by an adult, through what is called a ‘sponsored account’, until the user turns 18.

Cash App already has about 5 million monthly active teen users, said Owen Jennings, executive director and chief operating officer at Block.

A number of other platforms already offer fintech services to children. MrBeast, the viral TikTok star, recently concentrated government control on the acquisition of Step, which offers financial services to users under 18 years of age. Proponents of such services say it teaches their young users about financial literacy and responsibility, though critics they claim it can actually do the opposite.