Venmo Credit Card Holders Can Now Get Rewards Back In Bitcoin

Aug 11, 2021 0 comments

image: npr.org.

On Tuesday, PayPal announced that Venmo credit card holders, which operate on the Visa network, will be able to convert cash back earned on their card into cryptocurrency for free. Through a new program called “Cash to Crypto”, users will be able to purchase the four cryptocurrencies currently supported by the company, Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Venmo initially began offering crypto brokerage services to its clients in April, shortly after its parent company PayPal did the same late last year in October.

One of the more novel aspects of this new program will be the commission free nature of the transactions. Many competitors in the crypto space have relatively high transaction fees when converting U.S. dollars to bitcoin for example, especially for smaller purchases. Industry leader Coinbase charges between .5% - 4.5% depending on which method is used to pay for crypto transactions. Venmo’s parent company PayPal charges up to 2.3% for buying and selling crypto through the app.

These rates have turned off some potential crypto investors used to commission-free trading, so this new approach could appeal to that sector in particular.

However, that does not mean that the transaction is truly ‘free’, as Venmo will charge an undisclosed conversion spread with each transaction in a fashion similar to how Robinhood operates.

"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." said Darrell Esch, SVP and GM of Paypal’s Checkout Solutions in a press release.

Venmo’s offering becomes the third credit card to allow users to receive crypto rewards, just behind Mastercard’s partnership with Gemini that allows up to 3% rewards in crypto on purchases and Visa’s partnership with BlockFi announcing last month the launch of its own crypto rewards credit card providing 1.5% back in bitcoin on every purchase.

Sourced from forbes.com.

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