Venmo said its credit cardholders can now convert their cashback amounts into cryptocurrency for free.
PayPal, the parent company of Venmo said its credit cardholders can buy crypto through cashback. The Cash to Crypto porgramme allows users to purchase four cryptocurrencies supported by Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
Cash to Crypto programme has no transaction fee
The new feature will carry no transaction fees. Instead, a cryptocurrency conversion spread is built into each monthly transaction. It is similar to how PayPal is handling checkout with crypto, which allows online shoppers to make purchases using cryptocurrency. The cryptocurrency is converted to fiat, but no transaction fee is involved. The new feature expands the choice for consumers as to how they want to spend their cashback while exploring cryptocurrency.
Darrell Esch, senior vice president and general manager at Venmo said, “The introduction of the cashback to crypto feature for the Venmo credit card provides customers a new way to start exploring the world of crypto, using cashback earned each month to automatically and seamlessly purchase one of four cryptocurrencies on Venmo”.
“We’re excited to bring this new level of feature interconnectivity on the Venmo platform, linking our Venmo credit card and crypto experiences to provide another way for our customers to spend and manage their money with Venmo,” he added.
Customers need to navigate to the Venmo credit card home screen in the app to enable cashback to crypto. Select the Rewards tab, then “Get Started,” and agree to the terms. Select the crypto of your choice, and confirm. Once enabled, when the cash-back funds hit the customer’s Venmo balance, the money is immediately used to make a crypto purchase. There is no interaction required from the user. The customers can hold or sell their crypto within the Venmo app. The feature can also be turned on or off at any time.
Mastercard partners with Gemini while Visa ties up with BlockFi
Venmo becomes the third credit card lender to allow users to receive crypto rewards just behind MasterCard's partnership with Gemini which allows up to 3% rewards on crypto purchases and Visa’s partnership with BlockFi that launched its own series of crypto rewards credit card offering 1.5% cashback in bitcoin on every purchase.
Venmo first introduced the ability for customers to buy, hold and sell cryptocurrency in April in partnership with Paxos Trust. Venmo’s more than 76 million users can access cryptocurrency using the Venmo app.
The cashback feature paired with easy access to cryptocurrency can help drive new customers for the Venmo credit card. Venmo cardholders can earn monthly cashback across eight different categories and the highest percentage of cashback earned is 3% on their top spending category followed by 2% and 1% on other categories. The cashback for the top two categories is adjusted monthly, based on where consumers are spending the most.
It has a commission-free feature. There are many companies in the crypto space that charge high fees. Coinbase charges 0.5% to 4.5% depending on which method is used to pay. PayPal charges up to 2.3% for the buy and sell of crypto through the app.
Cash to Crypto is a plus point for investors looking to invest in the cryptocurrency world but wouldn’t want to pay high charges for conversions.