On Monday, Venmo launched Venmo Stash, a new rewards initiative that gives users cash back when they make purchases with select brands through the app and use various Venmo features.
Although cashback incentives are typically associated with credit cards, Venmo’s program returns up to 5% cash back directly to users’ Venmo Mastercard Debit Cards.
According to the company, this initiative aims to encourage ongoing engagement with Venmo by increasing the flow of money within its platform.
At the same time, this approach highlights a broader trend among brands seeking to connect with younger consumers, who often prefer debit cards over credit cards.
A 2024 report referenced by eMarketer found that just 39% of Gen Z respondents said they regularly used credit cards, compared to 51% among older age groups. Another survey by Morning Consult for Cash App Afterpay earlier this year revealed that 63% of Gen Z participants preferred debit cards to other payment options.
Consequently, payment companies and retailers are adapting to younger shoppers by introducing more debit-based rewards and providing alternative checkout choices, such as “buy now, pay later” services like Affirm, PayPal Pay Later, and Klarna.
For Venmo, the rewards program is structured to increase benefits as users engage more deeply with its products, which the company believes will help retain customers within the Venmo ecosystem.
This also puts Venmo in competition with similar cashback programs from competitors, such as Cash App’s offers for its own debit cardholders.
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Image Credits:Venmo
At launch, users receive 1% cash back on purchases made with their Venmo Debit Mastercard when spending from their Venmo balance. If they enable automatic reloads to maintain their balance, the reward increases to 2%. Those who receive monthly Direct Deposits on Venmo can earn up to 5% cash back.
Unlike traditional rewards programs that offer set percentages for categories like groceries, fuel, or dining, Venmo’s system lets users choose from curated groups of preferred brands. For example, one bundle might include McDonald’s, TikTok Shop, Uber, and Uber Eats, while another could feature Amazon, DoorDash, Domino’s, and Walgreens.
Venmo, which is owned by PayPal, also announced that next year, Venmo Stash will broaden its offerings to include rewards for purchases made with Venmo at participating merchants nationwide.
