The news: Cash App rolled out an extra layer of protection for minors’ P2P payments, with automatic flagging for sponsors (parents or guardians) to approve risky requests.

How the new safety feature works:

• Safe, routine teen payments will process uninterrupted.
• All detected possibly unsafe payments will be immediately paused.
• Potentially risky payments are then flagged for parent or guardian approval.
• Parents can choose to permanently prevent future transactions with risky peers and report counterparties.
• Cash App may also unilaterally block high-risk payments and send notifications to parents and guardians.

Why this matters: Cash App has been bullish about capturing teens within its payment ecosystem. The fintech targets teen users with features like personalized Visa debit cards, investment opportunities in stocks and Bitcoin, and discounts at shops. 

Most recently, Cash App even netted a Timothée Chalamet partnership and advertisement, encouraging financial literacy among Gen Z and Gen Alpha.

But to reach minors, Cash App has to secure adult users’ confidence in the app’s safety. All users from the ages of 13 to 17 are siloed in Family Sponsored Accounts, which can only be accessed through a parent or guardian’s invitation. Maintaining a safety-first environment could inspire enough trust in adult users to onboard their children, allaying whistleblower allegations around safety as recently as last year.

Our take: Attracting young users at the beginning of their financial lives can yield long-term loyalty to the app. 

Bolstering its safety features increases the probability that adults will let their younger teens use the platform, which increases the likelihood those teens adopt Cash App’s banking, payments, and investments services over time.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.