PayPal launches debit card service

The Student Account function would allow parents to create sub-accounts for children

PayPal is launching a service which will allow users to better manage accounts which are shared with family members.

The company said that the new Student Account function would allow parents to create special sub-accounts for children to use online. The accounts can be managed by parents and funded through a single master account.

Parents will be able to dictate how much money is deposited in the account and then set permissions on spending and receive alerts for online purchases.

By keeping a controlled sub-account for younger users, PayPal hopes to shield both the master account and parents' credit card information from possible fraud and identity theft.

Such a system of blocking off a master account could be of particular use to small business owners who rely on PayPal accounts to process transactions on home office or shared machines.

The ability to more tightly control and protect PayPal accounts from fraud and theft has become a major priority for the company, particularly as it looks to expand into the larger e-commerce world. Earlier this year PayPal announced a deal with VeriSign to use the company's VIP authentication system.