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Venmo announced on Tuesday 10th August, the debut of a credit card functionality that allows customers to convert their cash-back rewards into bitcoin and other cryptocurrencies. In April 2021, Venmo provided the option for users to purchase, hold, and trade bitcoin as part of a broader cryptocurrency initiative spearheaded by parent firm PayPal. Venmo’s more than 76 million customers may now access bitcoin directly within the Venmo app, thanks to a collaboration with Paxos Trust Company, a regulated distributor of cryptocurrency goods and services. This newest move provides it the chance to attract a slew of new bitcoin investors.
The cash-back function may assist increase Venmo Credit Card sign-ups by connecting it to the bitcoin capabilities. Venmo cards may now receive monthly cash back in eight distinct areas, with up to 3% back on their top qualifying spending category, then 2% and 1% back on the second highest and all other purchases, respectively. The top two categories are adjusted monthly based on where customers spend the most.
Venmo’s 76 million customers may use bitcoin, ether, litecoin, and bitcoin cash. Customers are unable to take digital assets off the platform at this time, so any incentives converted to cryptocurrency will remain in their Venmo app until they want to sell them. Robinhood, an American financial services company which has about 18 million active members, provides fee-free cryptocurrency trading. At least for retail traders, Coinbase, which is set to announce results Tuesday evening, has some of the highest fees. Coinbase has a user base of around 56 million people.
Customers must go to the Venmo Credit Card home page in the app, choose the Rewards option, and then “Get Started” to enable Cash Back to Crypto. They’ll next agree to the conditions, choose their preferred cryptocurrency, and confirm their decision. When the cash-back funds arrive in the customer’s Venmo account, they are instantly used to make a bitcoin transaction – no user input is necessary. According to Venmo, the feature may be turned on or off at any moment.
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Venmo and PayPal keep their tiered charge system for everyday buying and selling, starting at 50 cents for transactions under $25. It charges 2.3 percent on amounts between $25 and $100. It charges 2% on transactions between $100 and $200, 1.8 percent on transactions between $200 and $1,000, and 1.5 percent on purchases beyond $1,000.
Venmo’s cash-back to cryptocurrency conversion scheme comes at a time when digital currency is gaining traction in Washington. According to the company, Cash Back to Crypto is a way for newcomers to cryptocurrencies to enter the market without having to worry about the procedure of purchasing bitcoin. It’s more of a set-it-and-forget-it function than anything else. These cash back-enabled crypto purchases will likely be minimal until customers make regular and frequent transactions with their Venmo Credit Card. The company hasn’t disclosed how many Venmo credit card customers are presently active on the platform. Venmo Credit Card customers will be able to use the new option starting on Tuesday 10th August.