Venmo, PayPal’s mobile payments subsidiary, will soon enable credit cardholders to automatically purchase cryptocurrency using their cashback rewards.
According to an announcement, the company will enable Venmo credit card users to automatically purchase cryptocurrency using cashback rewards earned on credit card purchases.
Venmo, which is owned by PayPal, is expanding its support for cryptocurrency today with the launch of a new feature that enables users to automatically purchase cryptocurrency using cash back earned on Venmo credit card purchases. Unlike when purchasing cryptocurrency directly, these automated purchases will incur no transaction fees — a feature Venmo claims is not a promotion but rather how the system will function in the long run. Rather than that, each monthly transaction includes a cryptocurrency conversion spread.
Venmo customers can enable Cash Back to Crypto by navigating to the Venmo Credit Card home screen in the app, selecting the Rewards tab, and then clicking “Get Started.” They’ll then agree to the terms, select their preferred cryptocurrency, and confirm their selection. Once enabled, when a customer’s cash-back funds reach their Venmo balance, they are immediately used to make a crypto purchase — no user interaction is required.
The feature will be free of transaction fees, as each monthly transaction will include a cryptocurrency conversion spread. This is comparable to how PayPal handles Checkout with Crypto, which enables online shoppers to pay with their cryptocurrency. Although the cryptocurrency is converted to fiat, no transaction fees are charged.
In April, Venmo began rolling out cryptocurrency trading functionality. Customers can now buy and sell various cryptocurrencies, view market data, and access educational content as a result of the move. The app supports trading in four cryptocurrencies: bitcoin, ether, litecoin, and bitcoin cash.
Keeping up with the crypto world
Cash Back to Crypto is viewed by the company as a way for newcomers to cryptocurrency to enter the market without having to worry about the cryptocurrency purchase process. This is a more set-it-and-forget-it feature. However, unless users make frequent and consistent transactions with their Venmo Credit Card, these cash back-enabled cryptocurrency purchases are likely to be small.
PayPal, which was founded by Peter Thiel and others, now serves over 400 million customers and merchants worldwide. However, the more than the two-decade-old company is clearly eager to stay abreast of developments in the cryptocurrency space.
Along with its March acquisition of crypto security firm Curv, The Block reported in May that PayPal has held exploratory talks about launching its own stablecoin.
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