Venmo on Monday launched a brand new rewards program called Venmo Stash, offering money back to customers who transact with their favorite brands through the payments app and interact with Venmo’s products.
While cashback rewards are a standard bank card incentive, Venmo’s rewards — which could be as high as 5% — are refunded on Venmo’s Mastercard debit card.
The program is meant to incentivize continued use of the Venmo service by bringing more funds into the ecosystem, the corporate explains.
However, this program also represents a brand new way that today’s brands try to succeed in younger users, lots of whom prefer debit cards over bank cards.
A study from 2024 quoted by eMarketer stated that only 39% of Generation Z users reported using bank cards ceaselessly, in comparison with 51% of older generations. Another Morning Consult survey for Cash App Afterpay from Earlier this yr found that 63% of Gen Z users said they like debit cards over other payment methods.
As a result, payment providers and retailers try to accommodate younger consumers by introducing more debit rewards and offering alternatives at checkout – similar to using buy now, pay later (BNPL) services similar to Affirm, PayPal Pay Later or Klarna.
In Venmo’s case, this system is designed to supply greater rewards as customers interact more with Venmo products. This will keep them invested within the Venmo ecosystem, the corporate believes.
It also competes with other cashback incentives offered by Venmo’s competitors. like Cash App’s offeringsthat are distributed to its own Cash App debit card customers.
First, customers will receive 1% money back on their Venmo Debit Mastercard after they spend their Venmo balance. Rewards increase to 2% when customers activate auto-top-up to have their balance mechanically replenished. And customers can earn 5% money back after they receive direct deposits on Venmo every month.
However, as an alternative of returning a certain percentage by spending category like groceries, gas or dining, the Venmo program allows customers to select from curated packages from their favorite brands. For example, you could possibly select a bunch of brands that features McDonald’s, TikTok Shop, Uber, and Uber Eats, or one that features Amazon, DoorDash, Domino’s, and Walgreens.
The PayPal-owned company says Venmo Stash will expand next yr to supply customers rewards after they pay with Venmo at merchants in its nationwide network.
