India’s digital payments ecosystem continues to evolve as fintech platforms expand services aimed at younger users and family-led financial management. In the latest move within the consumer fintech space, Paytm has introduced ‘Pocket Money’, a feature designed to enable teenagers to make UPI payments without requiring their own bank accounts.
The feature is built on National Payments Corporation of India’s UPI Circle framework, allowing parents or family members to provide supervised spending access to teenagers through the Paytm application. The launch reflects growing demand for controlled digital payment solutions tailored for younger consumers within India’s expanding UPI ecosystem.
According to the company, teenagers can use the feature for everyday transactions including school and college canteen payments, metro travel, cab rides, mobile recharges, and shopping purchases. Parents are also provided with the ability to set monthly spending limits and monitor transactions in real time, enabling greater oversight and spending control.
Under the framework, individual transactions are capped at ₹5,000, while the overall monthly limit across the UPI network is restricted to ₹15,000. The feature is currently supported on savings and current accounts, while services such as international payments and cash withdrawals remain unavailable.
The company stated that teenagers can make payments directly from their own devices without requiring access to parental smartphones, OTP verification sharing, or QR-code forwarding through messaging applications. Paytm has also integrated the feature with its ‘Spend Summary’ tool, which categorises expenses to help families monitor spending behaviour and manage allowances more efficiently.
To strengthen security and fraud prevention, the Pocket Money feature includes additional controls such as a ₹500 transaction limit during the first 30 minutes after activation and a ₹5,000 cap during the first 24 hours. Device lock functionality is mandatory, while parents retain the ability to modify limits or revoke access at any time using their Paytm UPI PIN.
The service is available on the latest versions of the Paytm app across both Android and iOS platforms.
The launch comes amid increasing competition within India’s youth-focused fintech segment. Startups including Fam, Walrus, and Junio had previously introduced supervised spending solutions for minors through prepaid cards and digital wallets. However, several fintech players including Fam, Akudo, and Muvin faced operational challenges after the Reserve Bank of India restricted co-branded prepaid payment instrument-based UPI arrangements for companies without independent PPI licences.
Unlike earlier models, Paytm’s Pocket Money feature is integrated directly with NPCI’s UPI Circle infrastructure, enabling delegated UPI transactions without requiring teenagers to independently open bank accounts. The move reflects the broader shift towards regulated, infrastructure-backed digital payment systems as India’s fintech ecosystem continues to expand financial accessibility and digital payment adoption.
