Want to save money without a bank account? Now teens can turn financially independent

Paytm has introduced a new feature called ‘Pocket Money’ that allows teenagers to make UPI payments without needing their own bank account.

The feature works through UPI Circle, powered by the National Payments Corporation of India, and is designed to give teenagers controlled access to digital payments while allowing parents to monitor spending.

With the feature enabled, teenagers can make online and offline payments through the Paytm app on their phones. Parents or family members can set monthly spending limits and track transactions in real time.

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A Paytm spokesperson was quoted as saying by News 18, “With Paytm Pocket Money, teenagers can start using Paytm UPI for everyday payments without needing their own bank account, while parents and family Paytm members stay in control. It brings pocket money into a safe digital format and helps families build responsible money habits early."

How the feature works

Parents or trusted family members can activate the feature directly from the Paytm app. Once the setup is completed, teenagers can make UPI payments through the balance linked using UPI Circle.

According to the company, each transaction is capped at Rs 5,000, while the monthly spending limit across the UPI network is restricted to Rs 15,000.

The feature supports both savings and current accounts. However, international transactions and cash withdrawals are not permitted.

Safety and spending controls

Paytm has introduced several safeguards as part of the feature rollout. During the first 30 minutes after activation, payment limits are restricted to Rs 500. The limit increases to Rs 5,000 during the first 24 hours.

A device lock is mandatory to use the feature. Parents can also modify spending limits or revoke access anytime using their Paytm UPI PIN.

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The app additionally allows family members to monitor transaction history directly.

How to activate ‘Pocket Money’

Users need to update the Paytm app if the feature is not visible. After opening the app, users can go to the ‘To Mobile / Contact’ section and select ‘Pocket Money’.

They can then choose the contact, scan the UPI QR code or enter the UPI ID, verify the details, set a spending limit and complete authentication using the Paytm UPI PIN. The teenager must accept the invitation before the feature becomes active.