Venmo, the payment app owned by PayPal, has added a new feature to its credit card. Starting soon, users will be able to use their cash-back rewards to purchase a variety of cryptocurrencies.
According to the company, customers can use their cash-back rewards to auto-purchase Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Once purchased, the digital currency remains in the customer’s account until they choose to spend it.
Venmo says there are no transaction fees associated with the purchases. A cryptocurrency conversion spread is built into each monthly transaction.
"The introduction of the Cash Back to Crypto feature for the Venmo Credit Card offers customers a new way to start exploring the world of crypto, using their cash back earned each month to automatically and seamlessly purchase one of four cryptocurrencies on Venmo," said Darrell Esch, a senior vice president at Venmo. "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 is the second fintech company to link its credit card to the world of cryptocurrencies. Last month, Upgrade launched a credit card that pays rewards in bitcoins.
The Upgrade Bitcoin Rewards Card is an update of the company’s existing Upgrade Card, with the added feature that rewards are paid in the volatile cryptocurrency. Users earn unlimited 1.5% Bitcoin rewards on every purchase as they make payments.
To use a Venmo credit card to purchase digital coins, users navigate to the Venmo Credit Card home screen, select the rewards tab, and then click on “get started.” Once customers have agreed to the terms, they will be able to select their crypto of choice.
Cardholders can return to the rewards screen at any time to turn the auto-purchase feature on or off -- or even change the cryptocurrency they would like to purchase during the month.
Using auto-purchase, a cardholder’s cash-back rewards are automatically converted into the digital currency of their choice. Since the values of these digital coins can be volatile, the amount of cryptocurrency that’s purchased through rewards may vary from month to month.
Once purchased, the cryptocurrencies remain in the customer’s account until they choose to sell them, converting them back to dollars.