Venmo is entering the cashback arena in a big way, hoping to capture the spending habits of younger generations who increasingly favor debit cards over credit. The company launched “Venmo Stash” – a rewards program that offers up to 5% cash back directly into users’ Venmo Mastercard Debit Card accounts. This marks a significant shift in the payments landscape, where cashback programs have traditionally been associated with credit card use.
The move comes as consumer preferences evolve, particularly among Gen Z. Research paints a clear picture: younger consumers are less likely to embrace credit cards. A 2024 eMarketer study found that only 39% of Gen Z users frequently used credit cards compared to 51% of older generations. A separate Morning Consult survey for Cash App Afterpay earlier this year revealed that a staggering 63% of Gen Z consumers preferred debit cards over other payment methods.
Recognizing this trend, Venmo is aiming to keep its users engaged and within its ecosystem by offering substantial rewards directly tied to their debit card spending. By partnering with popular brands like McDonald’s, TikTok Shop, Uber, DoorDash, Amazon, Domino’s, Walgreens, and more, Venmo offers tailored “bundles” of cashback opportunities. Users choose the brand packages that best align with their purchasing habits.
How Venmo Stash Works
The rewards structure is designed to incentivize ongoing engagement:
- Base Level: Customers earn 1% cash back on all purchases made using their Venmo Debit Mastercard when they spend their Venmo balance.
- Enhanced Rewards: This rises to 2% for users who activate automatic reloads, ensuring a consistent Venmo balance.
- Maximum Cash Back: Users can maximize their rewards with 5% cash back by receiving Direct Deposits directly into their Venmo account each month.
Competition and the Future of Debit Rewards
Venmo’s Stash program puts it in direct competition with rival platforms like Cash App, which offers cashback incentives through its own debit card offerings. As more payment providers recognize the shift towards debit among younger users, expect to see a surge in innovative rewards programs tailored specifically for debit cardholders.
The future of digital payments might well be defined by these increasingly competitive cashback battles, driven by the changing preferences of financially savvy Gen Z and millennial consumers.
