Online buying by teens to rocket

Teenage online spending across seven European countries and the US will soar to $10.6bn by 2005 from $483m in 2000, according to research released today.

Datamonitor's report, Online Teen Payments, found that as teenage payment systems, such as prepaid plastic cards, become increasingly commonplace, payment providers should take responsibility to encourage money-management skills among young consumers.

Julie Cunningham, financial services analyst at Datamonitor, said: "In giving teens a card of any sort they are familiarising them with plastic. However, it does not necessarily follow that they are encouraging a debt ridden society."

Cunningham added that there is a need in the market for a teen payment product that allows secure payments online. "Teens want to have their independence and to shop online," she explained.

The report also found that both traditional players and new entrants will have a part to play in the new market. According to Datamonitor, new entrants can attract teens through the 'cool factor' while traditional players should use their established role as a way to convince parents and gain their support.

It added that, while US teenagers in general have much more money at their disposal than their European counterparts, Europe will see more independent payment systems emerging from independent companies such as Smartcreds and Splash Plastic, as well as banks.