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Comment by olympus | Hacker News Reader

I applaud the effort Amazon is making to expand its influence, and giving kids an Amazon allowance would lock them in because it doesn't look too easy to convert that money back to real cash.

But I don't think this one will stick around for very long. Prepaid cash/debit cards and automated deposits are an older and more proven way of doing this (not to mention just handing your kids $20 in cash every week). By giving them something that is accepted everywhere, you teach them how to handle limited amounts of money and how to resist temptations -- if I drop $5 on gas station snacks, I've just burned up a sizeable chunk of my allowance on something that will be gone in 10 minutes. Giving an allowance is great to teach young teenagers how to handle money before they get their own job, but I don't see Amazon breaking into this and locking kids into buying only from Amazon.

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If you give teenagers cash, they can't spend it online. Thanks to KYC rules and bank policies, you have to be 18 to get anything that looks like a credit card.

Best plan for teenagers is a joint checking account (dedicated to the child's use) at your bank, with a debit card they can use for day-to-day spending. You can do allowance, etc with transfers, and most bankd will play ball as long as one person on the account (the parent) is 18.

> If you give teenagers cash, they can't spend it online. Thanks to KYC rules and bank policies, you have to be 18 to get anything that looks like a credit card.

What about those prepaid cards you can buy for cash at B&M stores? I'm pretty sure you can use those online.

sometimes those cards don't work for some online stores because there is no address associated with the card, so card verification systems may fail.

many online stores i've seen/used actively block those cards due to fraud/chargeback/etc reasons

Every time I've bought one of those cards, it has me go to a website to register/activate it (set a PIN, associate it with my email address+password, and most importantly, assign it an address and phone number) before it'll work.

That's what I used in high school, but they're not very good value. You'd often need to pay a few bucks in fees just to use a $20 prepaid Visa card.

Activation requires you to (pretend to) be 18, AFAIK. Also they have quite hefty fees; a checking accout is free as long as you don't overdraft.

Checking account are free? Well, chequing accounts are not :(

Among the downsides of being in Canada is paying higher prices for anything that is not health care.

Sucks to be you. My checking account even gives me interest!

Look at your local credit union - many (not all, sadly) offer a free chequing account.

In the US most bank checking accounts have a monthly fee which is waived if you meet certain conditions, like maintain a minimum balance (I think mine was $1000) or get an automatic direct deposit at least 2 times per month of $250 or more - these would be hard to meet for a childs account. Credit unions are usually free though.

There is usually a "relationship waiver" that eliminates the fees on all the accounts you're party to as long as you have enough total wealth parked with that bank.

Are people also not technically allowed to use a prepaid credit card registered in someone else's name? A parent could activate the card and then give it to the child.

You could, but then you're still paying fees designed to exploit the unbanked. If the parent is financially secure, they can use that fact to get a free checking account for their child.

I had a debit card linked to a bank account well before I was 18, which I used to buy all sorts of things from the internet. Prior to that, when I purchased my first domain and paid shared web hosting in early high school, I remember buying a prepaid gift card which I used to make the purchase.

Why can't you use the debit card online? I had a debit card at 14 that I could use online (UK)

Wells Fargo gave me an account incl. debit card at 16.

In EU you can have a visa debit/mastercard debit card when you are 13 upwards.

Kids? I'm pretty sure the real market here is camgirls and other internet personalities that people want to buy presents for.

You can already send Amazon gift cards or buy things off someone's Amazon wishlist.

Patreon's innovation was the "monthly recurring donation." That's basically what this is as well. So one could say it's a direct competitor.

Yeah, that's the first thing I thought of ... seekingarrangement.com sorts of deals.

and stream hunnies.

not sure I even wanna know the difference between a cam girl and a 'stream hunny' O.o

Stream hunnies are cam girls for geeks. They pretend to stream games while flirting with teenage boys ans soliciting donations.

Groupies for the modern times we live in, if you wish.

Jeff Bezos, the world's newest, and wealthiest, pimp.

Life lessons aside, it's alot harder to spend your $20/week on weed or booze or gambling when it's an Amazon credit.

you can always sell it for 80%+ of it's value for cash or bitcoins... or ask your dealer what he needs from Amazon

This is an interesting payments case b/c with kiddos in the United States you need to deal with the Children's Online Privacy Act (ie the reason for the "are you 13 years or older" checkbox question)

One firm that's was trying to do kid payments was Virtual Piggy (now Oink): http://www.oink.com

> the reason for the "are you 13 years or older" checkbox question

I thought all the age-of-13 stuff, specifically, was because you can't legally enter yourself into a contract when you're younger than 13. Which is to say, you can't accept EULAs or Terms of Service (or you can, but they'll have no legal force.)

Obviously it depends on the jurisdiction, but typically minors cannot enter legally binding contracts. Some form of source:

http://www.lawchek.com/Library1/_books/contract/qanda/legala...

One interesting feature I wasn't aware of is that this does not generally apply to "necessities" or employment contracts.

It's COPPA. https://en.wikipedia.org/wiki/Children%27s_Online_Privacy_Pr...

Some people even consider COPPA to be a form of censorship. It creates such a huge legal burden on websites if they allow < 13 year olds, that most websites have to ban them, thus limiting their right to speech.

I wonder if it's solving for my problem where my kids buy a lot of video on demand. I'd like to cap that for each of them each month. It wouldn't hurt if it also was funds they could then use to replace the iPhone charger they break or lose each month.

I think kids away at college, especially for freshman year could be another use case. Parents know they are smart enough they probably could make the right financial choices, but just being a freshman in college means they probably won't.

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