Amid increased competition in the digital payments space, Venmo today announced its first-ever rewards program, Venmo Rewards, which will allow users to earn automatic cash back on purchases when they pay with their Venmo card at select retailers. The company is kicking off the program with limited-time cash back deals, including 5% back at Target, 5% back at Sephora, 4% back at Dunkin', 5% back at Wendy's and more.
The cash back earned through the program is deposited directly into your Venmo account, so you can use the funds to pay friends through the Venmo app, make Venmo card purchases, pay merchants that accept Venmo or transfer the money to your linked bank account or debit card.
Users will also be able to track their rewards in a dedicated section of the Venmo mobile app, where they can see what they've earned on each of their eligible purchases. They then can opt to share their rewards earned in the Venmo feed.
Similar to how credit card offers come and go, Venmo Rewards cash back deals will also expire at some point, as new ones arrive to take their place. Venmo cardholders will be able to check in on the current offers available to them at any time by visiting their card settings in the Venmo app.
The launch of a rewards program comes at a time when Venmo is facing increased competition in the digital payments space. Though originally a peer-to-peer money transfer service, Venmo added a debit card last year that allows users to spend their Venmo balance out in the real world, while still taking advantage of features like splitting bills and the social feed, which helped popularize the service among a younger demographic. Recently, Venmo announced plans to offer a credit card, as well.
Today, users don't necessarily reach for a Venmo card at point-of-sale, however.
They may prefer to use a card where they'll get airline miles or a retailer's store card, where they get a discount on the sale itself and/or loyalty points. Apple's new credit card is also growing in popularity for those who like a cash-back option, as it offers up to 3% back, which is then stored directly on your Apple Cash card -- the seamless transfer between the two made possible by the deep integration Apple allows for its own products.
In order to keep users participating in the Venmo ecosystem, the company needs to find new ways to encourage the use of its card, too.
Venmo Rewards will begin to roll out starting next week, Venmo says.