PayPal Holdings (NASDAQ:PYPL) announced yet another piece of good news for consumers earlier today. Venmo, a PayPal-owned payments platform, has enabled its cardholders to buy cryptocurrency with the monthly cashback rewards earned from Venmo credit card purchases.
According to reports, Venmo has launched a new update on its platform today dubbed the “Cash Back to Crypto” program, which will allow Venmo credit cardholders to acquire Bitcoin, Ethereum, and other supported crypto assets using cash rewards earned from credit card purchases.
PayPal was the sole owner of Venmo’s CashBack to Crypto Program.
Venmo and PayPal had a record-breaking day on August 10. Venmo, a payments service provider, was looking forward to expanding crypto services on its platform, so the company released a new upgrade on its platform called the Cashback to Crypto Program. Customers will be able to purchase cryptocurrency using credit card cashback rewards through this method. At the moment, Venmo only supports Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) for trading, and these four crypto-assets can be purchased with the cashback earned.
Typically, the platform charges a transaction fee ranging from $0.50 to 2.3 percent of the total transaction amount. However, there is some good news: the ‘cashback to crypto’ program will not impose any transaction fees on consumers. So, unlike traditional methods of purchasing cryptocurrency, which involved paying large transaction fees, Venmo has introduced a super unique feature that may eliminate all excess charges for consumers.
Venmo also stated that “the program will not support external wallets.” However, once a consumer has completed the purchase, he or she can keep and sell digital assets within the Venmo app. Venmo’s General Manager and SVP also stated that their team is eager to expand its crypto services and make the new upgrade available to customers as soon as possible.
The Cash Back to Crypto Program, according to reports, will begin on Tuesday, August 10, and will be available to all Venmo credit cardholders in the coming weeks.
Paypal and Venmo’s Reactions to the New Upgrade
The company believes that the Cash Back to Crypto program is an easier way for newcomers to enter the cryptocurrency market without having to worry about market volatility. According to Venmo, the program is more of a learning tool for customers. However, unless consumers use their Venmo Credit Cards frequently, cash back-enabled crypto purchases will remain relatively small.
According to experts, there is no data on the number of active Venmo credit cardholders in the market. And in such a case, predicting the project’s success is extremely difficult.