Venmo Launches Cash Back Rewards for Debit Cards

Venmo Launches New Rewards Program: Venmo Stash

Venmo announced the introduction of a new rewards initiative on Monday, known as Venmo Stash. This program provides cash back to users who complete transactions with participating brands through the payments application and actively utilize Venmo’s various products.

Cashback Rewards and the Venmo Mastercard

While cashback rewards are a standard practice with credit cards, Venmo’s offerings – potentially reaching up to 5% – are specifically credited back to the Venmo Mastercard Debit Card.

The primary goal of this program is to encourage continued engagement with Venmo’s services by increasing the volume of funds within its system, according to the company.

Reaching Younger Consumers

This initiative also signifies a novel approach for brands seeking to connect with younger demographics. Many younger consumers demonstrate a preference for debit cards over traditional credit options.

Gen Z Payment Preferences

Recent data highlights this trend. A 2024 study, as reported by eMarketer, revealed that only 39% of Gen Z regularly use credit cards, compared to 51% of older generations.

Furthermore, a Morning Consult survey conducted for Cash App Afterpay earlier this year indicated that 63% of Gen Z favor debit cards over alternative payment methods.

Adapting to Debit Card Demand

Consequently, payment providers and retailers are adapting to the preferences of younger consumers. They are implementing more debit rewards programs and introducing alternative checkout options, such as “buy now, pay later” (BNPL) services like Affirm, PayPal Pay Later, and Klarna.

Venmo Ecosystem Engagement

Venmo’s program is structured to provide increased rewards as users become more involved with Venmo products. This strategy aims to foster greater investment within the Venmo ecosystem.

It also positions Venmo competitively against similar incentives offered by rivals, such as Cash App’s rewards for its debit card holders.

Reward Tier Structure

Initially, users will receive 1% cash back on purchases made with their Venmo Debit Mastercard using their Venmo balance.

This reward level increases to 2% when customers activate auto reloads to maintain a consistently funded balance.

The highest reward tier, 5% cash back, is attainable through monthly Direct Deposits into their Venmo account.

Brand Bundles and Future Expansion

Unlike some programs that offer percentage-based rewards by spending category, Venmo Stash allows customers to select from curated bundles of their preferred brands.

For example, users can choose a bundle including McDonald’s, TikTok Shop, Uber, and Uber Eats, or another featuring Amazon, DoorDash, Domino’s, and Walgreens.

The company, owned by PayPal, anticipates expanding Venmo Stash next year to include rewards for payments made with Venmo at merchants within its national network.