Venmo’s new rewards program Stash lets users earn rewards for activities such as receiving direct deposits or shopping with participating retail partners. However, these rewards don’t apply to the company’s flagship peer-to-peer payments service.
The Venmo Debit Mastercard already offers 1% cash back on purchases made from the card balance and 2% with auto reloads. Stash is designed to encourage customers to keep more funds in their accounts, offering up to 5% cash back for those who receive eligible direct deposits of at least $500.
“Venmo’s new reward plan is not only about increasing spending but about retention,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “Given the rewards enhancers for auto reloads and direct deposits, Venmo is trying to be a primary vehicle for consumer payments.”
A new Stash feature also lets cardholders choose from curated bundles of their favorite brandsto earn up to 5% cash back on Venmo debit card purchases. Users can select from groups of participating brands such as McDonald’s, TikTok Shop, and Uber.
“The personalization of rewards is a key feature of the Venmo merchant bundling,” Danner said. “Venmo isn’t the first to use merchant-funded rewards on a debit card, but the issuers do this because it is a way to fund the card without having to foot a large rewards expense bill on the issuer side.”
Not Applicable to P2P
At this point, there is no reward for making peer-to-peer payments, which remains Venmo’s core offering. According to CoinLaw, Venmo is projected to hold a 61.8% share of U.S. mobile P2P payment users in 2025, with a user base exceeding 100 million customers.
However, Venmo is exploring new ways to expand the Stash ecosystem. The company says consumers will start earning rewards for paying with Venmo at its network of nationwide merchants sometime next year.
Seeking Younger Consumers
Venmo has also been working to build up its debit card offering. CNBC reported last summer that penetration among Venmo users remained in the single digits, compared with 44% of Cash App users.
The move aligns with Venmo’s ongoing strategy to attract younger consumers, who tend to prefer debit cards over credit cards. Earlier this year, Morning Consult’s survey found that 63% of Gen Z had abandoned credit cards in favor of alternatives such as debit cards and cash.
