Cash App targets a new type of customer between the ages of 6 and 12

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

The company, which already provides financial services to teenagers, announced this week that it will expand its youth-focused services to build relationships with Generation Alpha and the next generation of American youth.

The new program will allow parents to create financial accounts for their children between the ages of 6 and 12. Children will not have access to the app, and these accounts will be controlled by parents, who will be able to deposit and monitor funds. Children, on the other hand, receive a debit card linked to an account that they can use to spend money.

These accounts can also receive P2P payments from a small number of authorized users (such as grandparents) and are eligible to earn up to 3.25% interest, the company said.

According to Kristen Anderson, Core Networks group product lead for Cash App, the goal is to teach children about financial responsibility. “Cash App has been serving teen accounts for years, but we knew through our customer base that there was a desire to get kids into the experience sooner,” Anderson told TechCrunch.

Anderson described the new feature as a way for kids to “learn about savings and savings goals,” combined with the app’s “Pocket Money” feature, which allows parents to schedule automatic transfers to their child’s account.

Tuesday’s announcement also said children can “graduate” from their Cash App accounts when they turn 13, with parental approval. Once users turn 13, they gain access to a wider range of Cash App services, including the ability to buy and sell Bitcoin and trade stocks. These activities must be monitored and approved by an adult via a so-called “Sponsored Account” until the User reaches the age of 18.

Cash App already has about 5 million monthly active teenage users, said Owen Jennings, Block’s executive director and business director.

Many other platforms are already offering fintech services to children. TikTok viral star Mr.Beast recently attracted intense government scrutiny after acquiring Step, which provides financial services to users under 18. Supporters of these services say they teach young users about financial literacy and responsibility, but critics say they may actually have the opposite effect.