In a relentless quest for new customers, Cash App, the fintech arm of Jack Dorsey's Block, has identified a promising demographic: children aged 6 to 12. The company, which already serves teens, is expanding its youth-focused services to build a relationship with Gen Alpha and the upcoming generation of adolescents in the U.S.
The new program allows parents to create financial accounts for their 6-12 year olds. The children themselves won't have access to the app; these accounts will be managed by parents, who can deposit and monitor funds. The children will, however, receive a debit card linked to the account to spend the money.
The accounts can also receive P2P payments from a small number of approved users (like grandparents) and will be eligible to earn up to 3.25% in interest. According to Kristen Anderson, group product lead for Core Networks at Cash App, the idea is to teach children about financial responsibility. She noted a customer desire to "bring kids into the experience earlier" and described the facility as a way for children to "learn about savings and savings goals," aided by an "allowance" feature for automated parental transfers.
The announcement notes that children can "graduate" to their own Cash App accounts at age 13 with parental approval. At 13, they gain access to a broader assortment of services, including buying and selling bitcoin and trading stocks, via a "sponsored account" monitored by an adult until they turn 18.
Cash App already boasts some 5 million monthly active teen users, according to Owen Jennings, executive officer and head of business at Block. They are not alone in this market; other platforms like Step, recently acquired by TikTok star MrBeast, also offer fintech services to users under 18. Proponents argue it teaches financial literacy, while critics contend it may do the opposite.