Venmo, the popular payment company owned by PayPal, is launching a service that allows you to convert cash back obtained via purchases with your card into 4 cryptocurrencies, including Bitcoin (BTC) and Ether (ETH).
Discounts to dive into crypto-currencies
On August 10, 2021, Venmo announced in a release, the launch of its Cash Back to Crypto service. Users of its card will now be able to automatically redeem the monthly cash back they get on their purchases, in cryptocurrencies. This automatic purchase function can be activated or deactivated at any time. This feature is currently only available to US residents.
For Darrell Esch, senior vice president and general manager of PayPal, this initiative will allow, Venmo customers to dive into cryptocurrencies using the discounts obtained on their purchases:
“The introduction of the Cash Back to Crypto feature for the Venmo credit card offers customers a new way to start exploring the world of crypto, using their cash back earned each month to automatically and seamlessly purchase one of Venmo’s four cryptocurrencies.”
1% to 3% of purchases in Bitcoin or altcoins
Card users will be able to convert their cashback into Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). Venmo will not charge transaction fees on each cryptocurrency purchase. Instead, the conversion fee will be built into the monthly card fee. Venmo offers between 1% and 3% cash back to its customers.
A 2020 study of Venmo’s customer behavior found that about 30% of its customers had purchased cryptocurrencies or stocks, with 20% of them starting to do so during the pandemic. Venmo launched its services for buying, storing, and selling cryptocurrencies via its app in April 2021.
Venmo’s revenue grew 183% year over year, according to PayPal’s July 28, 2021 earnings call during the second quarter. The platform has seen significant adoption of its cryptocurrency trading services.
PayPal and Venmo – the mother and daughter – continue to work toward cryptocurrency adoption. Venmo allows people to discover crypto currencies by purchasing them with discounts earned on purchases, while PayPal recently raised its weekly cap, allowing customers to purchase up to $100,000 in crypto currencies per week.