Venmo is expanding its payment ecosystem with a new cash back rewards program for debit card users. Announced Monday, the feature — called Venmo Stash — offers up to 5% cash back when customers shop with select brands and engage more deeply with Venmo’s products and services.
Unlike traditional credit card reward schemes, Venmo’s program ties its benefits directly to the Venmo Mastercard Debit Card, returning cash rewards to users’ accounts rather than issuing credit-based points. The company said the initiative is designed to encourage greater activity within Venmo’s ecosystem, keeping users’ funds circulating on the platform.
Venmo Stash is structured in tiers that increase based on user engagement. Cardholders start with 1% cash back when spending from their Venmo balance, move up to 2% when enabling auto reloads, and can earn 5% if they receive monthly direct deposits via Venmo.
Instead of assigning rewards by category, such as groceries or fuel, Venmo allows users to choose from curated brand bundles. Each bundle includes several popular merchants. For example, one might combine McDonald’s, TikTok Shop, Uber, and Uber Eats, while another could feature Amazon, DoorDash, Domino’s, and Walgreens.
Venmo’s parent company, PayPal, said the feature will eventually extend to allow users to earn rewards when paying directly with Venmo at participating merchants, beginning sometime next year.
The new program targets younger consumers, many of whom favor debit cards over credit. A 2024 eMarketer study found that only 39% of Gen Z users reported frequent credit card use, compared with 51% of older generations. A separate Morning Consult survey for Cash App Afterpay showed 63% of Gen Z respondents preferred debit cards to other payment methods.
As a result, fintech companies and retailers are expanding debit-based reward systems and alternative payment options such as “buy now, pay later” (BNPL) services like Affirm, PayPal Pay Later, and Klarna. Venmo’s move positions it in direct competition with Cash App, which already offers discounts and cashback deals through its Cash Card.
By linking higher reward rates to deeper engagement, Venmo aims to convert casual users into more active customers. The company sees Venmo Stash as both a retention tool and a way to attract younger consumers seeking financial flexibility without turning to credit.
Featured image credits: Unsplash
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