Paytm Launches Pocket Money Feature for Teenage UPI Users Without Bank Accounts

India's dominant payments platform Paytm has unveiled Pocket Money, a new offering that allows young people to conduct UPI transactions independently without requiring their own bank account. Developed using NPCI's UPI Circle framework, this service grants parents and authorised family members the ability to grant controlled spending privileges to teenagers while maintaining continuous oversight of all transaction activity through the Paytm application.

Through this mechanism, guardians can initiate a teenager's participation via UPI Circle, establish a monthly expenditure ceiling, and monitor payments in real time. To maintain security standards, individual payments cannot exceed ₹5,000, and cumulative monthly spending across the UPI network is capped at ₹15,000. The system operates with both savings and current accounts, though international transactions and ATM withdrawals are prohibited.

Multiple protective measures are embedded within the system. During the initial 30 minutes following activation, transactions are restricted to ₹500, expanding to ₹5,000 within the first 24 hours. Device security is compulsory, and parents retain the ability to adjust limits or terminate access immediately using their Paytm UPI PIN.

The feature works alongside Paytm Spend Summary, which automatically sorts transactions into categories, enabling households to examine spending behaviour and manage pocket money allocations over extended periods while fostering responsible financial practices among young users. Payment records remain continuously accessible to the parent via the Paytm application.

This functionality addresses a common scenario in many households—teenagers who currently depend on physical currency, share a parent's mobile device, or request QR code payments from guardians for everyday expenses including school and university canteen purchases, public transport fares, ride-sharing services, mobile top-ups, and e-commerce transactions.

Activation Process

To set up Paytm Pocket Money, follow these steps:

1. Ensure the Paytm application is updated to its latest version via the App Store or Play Store
2. Launch the app and navigate to 'To Mobile / Contact'
3. Choose 'Pocket Money' to begin configuration
4. Input or choose the contact for whom you wish to establish Paytm Pocket Money
5. Capture their UPI QR code or provide their UPI ID manually
6. Finish the verification procedure by submitting necessary document information
7. Establish a monthly spending cap from preset options or input a personalised limit
8. Designate your primary bank account and furnish your Paytm UPI PIN to finalise setup
9. The designated user must approve the invitation to commence using Paytm Pocket Money

If the 'Pocket Money' option remains unavailable, confirm that your Paytm application has been updated to the most recent version from either the App Store or Play Store.