On Monday, Venmo introduced a new rewards program called Venmo Stash. This program offers cashback to customers who transact with their favorite brands on the payments app and engage with Venmo’s products. While cashback rewards are common for credit cards, Venmo’s rewards are returned to the user’s Venmo Mastercard Debit Card and can be as high as five percent.
The company explains the program is designed to incentivize continued use of its service by bringing more funds into the Venmo ecosystem. This initiative also represents a new way for brands to reach younger users, many of whom prefer debit cards over credit cards.
A 2024 study indicated that only thirty-nine percent of Gen Z users reported frequent credit card use, compared to fifty-one percent for older generations. Another survey from earlier this year noted that sixty-three percent of Gen Z users said they favored debit cards over other payment methods.
As a result, payment providers and retailers are accommodating younger consumers by rolling out more debit rewards and offering alternatives at checkout, such as “buy now, pay later” services like Affirm, PayPal Pay Later, or Klarna.
In Venmo’s case, the program is structured to offer larger rewards as customers interact more with Venmo products. The company believes this approach keeps users invested in the Venmo ecosystem. It also allows Venmo to compete with cashback incentives offered by rivals, such as the offers for Cash App’s debit card customers.
Initially, customers earn one percent cash back for using their Venmo Debit Mastercard when they spend their Venmo balance. Rewards increase to two percent when customers enable auto-reloads to keep their balance replenished automatically. Customers can earn five percent cash back when they receive Direct Deposits into their Venmo account each month.
Instead of offering a percentage back by spending category like groceries or gas, Venmo’s program has customers pick from curated bundles of favorite brands. For example, one bundle could include McDonald’s, TikTok Shop, Uber, and Uber Eats, while another offers Amazon, DoorDash, Domino’s, and Walgreens.
The PayPal-owned company says that next year, the Venmo Stash program will expand to offer customers rewards when they pay with Venmo at merchants within its nationwide network.