PayPal-owned Venmo has come up with first of its kind scheme to attract crypto buyers who use their credit cards. They have announced a new feature that allows users to automatically buy crypto using cashback.
Unlike buying cryptocurrencies, these automated payments don’t carry any transaction fees. Moreover, a cryptocurrency conversion spread is built into each monthly transaction.
The new option will begin rolling out starting today to Venmo Credit Cardholders.
Cardholders can purchase Bitcoin, Ethereum, Litecoin, and Bitcoin Cash through the new “Cash Back to Crypto” option. With Venmo cashback, the company is expecting to drive sign-ups for their Credit Card. As of now, Venmo cardholders can earn monthly cashback in eight different spending categories: 3% back on their top eligible spending category, then 2% and 1% back on the second-highest and all other purchases, respectively.
Also, there is a monthly adjustment on the top two categories according to the consumer spending pattern. As said before, the feature doesn’t include any transaction fees. Interestingly, PayPal is also handling checkouts with PayPal in the same manner. PayPal allows online shoppers to do purchases with cryptocurrency. The cryptocurrency is converted to fiat, but there are no transaction fees.
Venmo noted that the user can turn this feature on or off according to his/her needs.
The company looks at this feature as a way to increase the cryptocurrency adoption rate. Now newcomers can enter the market without having to worry about the process of making crypto purchases. It’s more of a set-it-and-forget-it type of feature.
However, a user can only gain meaningful cashback if the person uses credit cards regularly for payments. Also, the company has yet to offer details on how many Venmo credit cardholders are active in the market.