Venmo, a mobile payment service owned by PayPal, is expanding its cryptocurrency support with the launch of a new feature that allows users to automatically buy cryptocurrency with cashback earned from Venmo credit card purchases.
According to Venmo, unlike when buying cryptocurrencies directly, there will be no transaction fees associated with these automatic purchases. This feature is not a promotion, but rather how the system will work in the long run. A cryptocurrency conversion spread is built into each monthly transaction, Venmo said in a statement.
Cardholders can now acquire Bitcoin, Ethereum, Litecoin, and Bitcoin Cash through the Venmo app’s new “Cash Back to Crypto” option, which will be available soon. Within the app, users can hold or sell such assets at any moment, as well as adjust their cryptocurrency preference.
The peer-to-peer payment (P2P) service already allows its 70 million+ users to acquire the four cryptocurrencies through a fee-based direct buying option in partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services, as part of a larger investment in cryptocurrency led by its parent company, PayPal which was launched in April.
“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.”
Venmo cardholders can currently earn monthly cashback in eight distinct categories, with up to 3 percent back on their top qualified spending category, then 2 percent and 1 percent back on the second-highest and all other purchases, respectively. Monthly adjustments are made to the top two categories based on where consumers spend the most.
There will be no transaction fees as each monthly transaction includes a cryptocurrency conversion spread. This is similar to how PayPal handles Checkout with Crypto, which allows online shoppers to use their cryptocurrency to make transactions. There are no transaction fees in the conversion.