PayPal, the online payment division of eBay, wants to help parents put a financial leash on their teenage children, reports the New York Times. Last month, the company quietly began testing a new system called PayPal Student Account, a flexible way for parents to give children ages 13 and older a measured amount of financial independence. The feature, currently in an invite-only beta period, allows parents to create up to four sub-accounts tied to their primary PayPal account. They can then allocate a single chunk of money or create a recurring allowance, which children can spend on any web site that accepts PayPal. If parents want to extend that buying power into the real world, they can also give their offspring a MasterCard debit card tied to their sub-accounts. There are no fees for the child; sellers will pay the service’s usual 2 to 3 percent fee on every transaction. PayPal has layered on some nice parent- and child-friendly features that make this an interesting way to set up and control a child’s budget. Parents can set alerts to monitor unwanted spending–they can get a text or eMail message asking them to approve any purchase over $100, for example–and they can turn off spending at any time for any reason. For children, there are ways to solicit more dough in a pinch. If they need cash unexpectedly, they can send a text message to PayPal with a simple command ("get $50"). That generates an instant text message to the parent, who can either approve or deny the request…

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