Paytm Launches ‘Pocket Money’ Feature: Safe UPI Payments for Teenagers Without Bank Accounts

Mumbai. Tuesday, 19 May 2026

Digital payments have become an inseparable part of daily life in India, but until recently, minors without their own bank accounts were largely left out of the cashless revolution. Teenagers frequently had to borrow a parent’s phone, wait around for one-time passwords (OTPs), or share WhatsApp screenshots of QR codes just to pay for a school snack or a quick cab ride.

To bridge this gap seamlessly, fintech pioneer Paytm has officially launched “Paytm Pocket Money.” Announced via a regulatory filing submitted to the stock exchanges, this innovative feature allows school and college-going teenagers to make independent UPI transactions without needing a personal bank account, all while keeping parents firmly in the driver’s seat.

How the Paytm Pocket Money Feature Works

The backbone of this service is the advanced UPI Circle framework, introduced by the National Payments Corporation of India (NPCI).

Instead of opening a new, separate bank account for a minor, the system utilizes a delegated payment model. A primary account holder—typically a parent or a trusted guardian—authorizes a secondary user (the teenager) to initiate payments directly from the parent’s existing linked bank account.

This enables teenagers to scan any standard UPI QR code or send money to a contact directly from their own smartphones, removing the hassle of cash allowances or repeated OTP requests.

Strict Spending Limits & Guardrails

To prevent impulse spending and ensure a safe onboarding environment, Paytm has integrated a multi-tiered security structure into the app. The financial boundaries are structured as follows:

Important Security Note: A secure, active device lock (PIN, pattern, or biometrics) is mandatory on the teenager’s smartphone to activate and maintain the service.

Total Parental Control & Oversight

While teenagers enjoy newfound financial independence, parents retain 100% control over the purse strings. Through the dedicated dashboard on the parent’s app, guardians can:

• Track in Real-Time: Receive instant alerts and monitor exactly where and how much their children are spending.

• Analyze Financial Habits: The feature integrates directly with Paytm’s Spend Summary tool, automatically categorizing transactions (e.g., food, travel, shopping) to teach children smart budgeting habits early.

• Instant Modification: Parents can alter the monthly limit at any given time or instantly freeze/revoke payment access using their Paytm UPI PIN.

Step-by-Step: How to Activate Paytm Pocket Money

Setting up the feature takes less than five minutes. Parents can initiate it by following these steps:

1. Update the Paytm App to the latest version via the Google Play Store or Apple App Store.

2. Open the app and navigate to the “To Mobile/Contact” section.

3. Tap on the “Pocket Money” icon.

4. Select or manually enter your child’s mobile number.

5. Scan their unique UPI Circle QR code or enter their UPI ID.

6. Complete the basic document verification requirements for the secondary user.

7. Set a custom monthly spending allowance (up to ₹15,000).

8. Choose your primary funding bank account and authenticate the setup using your UPI PIN.

9. Your child will receive an invite on their phone; once they click “Accept” via their own Paytm app, the feature goes live!

A Smarter Middle Ground for Indian Families

The Paytm Pocket Money feature solves a major daily friction point for modern, digital-first households. It effectively transitions traditional pocket money into a secure, traceable digital ecosystem—giving teenagers a controlled taste of financial responsibility while offering parents total peace of mind.

Related Links

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