Paytm has launched Pocket Money, a feature on its app that allows teenagers to conduct UPI payments without holding their own bank account, by linking to a parent or trusted family member's account under defined spending controls.
The feature operates through the National Payments Corporation of India's (NPCI) UPI Circle framework, which enables a delegated payment model. Under this arrangement, a parent or trusted adult authorises a secondary user, in this case a teenager, to initiate transactions directly from the primary account holder's linked bank account. Access is managed through the Paytm app and can be revoked instantly using the Paytm UPI PIN.
Spending limits and safety controls
Paytm Pocket Money applies a tiered set of transaction limits aligned with NPCI guidelines. In the first 30 minutes after setup, aggregate spending is capped at INR 500 (USD 5.92). Within the first 24 hours, the limit rises to INR 5,000 (USD 59.17). Individual payments are also capped at INR 5,000 per transaction, and total monthly UPI spending is restricted to INR 15,000 (USD 177.51) across the active UPI network. International payments and cash withdrawals are not permitted under the feature. Device lock is a mandatory requirement for activation.
Parents can modify spending limits at any point and retain real-time visibility of all transactions made through the feature. Each payment is automatically categorised within Paytm's Spend Summary tool, providing a structured view of expenditure over time.
Contextual significance
UPI has grown into one of India's primary retail payment infrastructures, processing billions of transactions monthly across online and offline merchants. However, access to UPI has historically required the user to hold their own bank account, which excludes minors. The UPI Circle framework, introduced by NPCI, addresses this gap by allowing delegated access, making it possible for institutions and app providers to extend UPI functionality to users without their own accounts.
Paytm Pocket Money targets everyday spending categories such as transport, school canteens, mobile top-ups, and general retail. Setup is completed within the app by the primary account holder, who scans the teenager's UPI QR code or enters their UPI ID, sets a monthly limit, and authenticates with their UPI PIN. The teenager must then accept an invitation to activate access.
A company spokesperson stated that the feature brings pocket money into a digital format while keeping parents in control of allowances and spending access.
