Venmo, a popular money transfer app owned by PayPal, is adding a new cash back program for users of its debit card as it searches for ways to make more money from its large but not profitable user base.
The company said that the “in-app” rewards program would be free to use and offer additional cash back at merchants like Target and Wendy’s while sporting a handful of other promotions and discounts until now unfamiliar to Debit Mastercard holders.
The tiered system pays up to 5% on food purchases at such spots as Shake Shack, Chipotle and Dunkin’ over several weeks this month – offering boosts eligible customers can redeem in their accounts as well as on outlays elsewhere.
“The launch of rewards is an important step that further engages our community,” said Zach Dweck, general manager of Venmo. “For instance, if they invited some friends last night or ran into each other during the day today … there’s increased intrigue.”
Dubbed Venmo Stash, the program is designed to keep money flowing within Venmo while offering users brand-specific rewards instead of relying on traditional category playbooks.
While credit cards rain down points on dining or travel, Venmo Stash links them to engagement with the app. Cardholders begin at 1% when using their Venmo balance, rise to 2% with automatic reloads enabled and can work their way up to 5% if they receive monthly direct deposits into the app. Cash back goes right into the Venmo Debit Card, creating a loop that gives you more reason to use it: for your everyday spending.
Rewards aren’t open-ended. Users select from curated sets of brands rather than broad categories of merchants. One bundle could feature McDonald’s, TikTok Shop, Uber and Uber Eats; another might have Amazon, DoorDash, Domino’s and Walgreens. It’s a marketing-forward system that places partner brands right in front of an engaged, mobile-first audience.
How the Venmo Stash debit rewards program works
The program focuses on three levers: balance spending, auto reloads and direct deposit. When enabled, each lever raises the cash back rate one notch, capping out at 5% for those who have their paychecks deposited into Venmo. And those dollars land back on the Venmo Debit Card, which is issued on the Mastercard network and can be used anywhere that accepts the card.
Venmo’s replacement of category math with brand bundles in this respect changes the economics. Rather than paying everywhere in dining or gas, specific merchants pay part of the reward as a targeted acquisition cost. The option to link a rewards program to a card in this way has grown increasingly popular among issuers and fintechs, as it offers brands the benefit of clear quantification and also steers them away from subsidizing rewards where they are not strategic.
Venmo says the program will eventually cover purchases made with Venmo at participating merchants in its broader acceptance network, a move that could put Stash in place to cover both card swipes and app-based checkout down the road.
Why debit rewards are surging in popularity right now
Debit has quietly become the payment rail of choice for many younger consumers. eMarketer has written that only 39% of Generation Z say they use a credit card often, and that number trails older cohorts; for its part, a Morning Consult poll conducted on behalf of Cash App Afterpay found 63% of Gen Zers prefer debit to other methods. Federal Reserve research also indicates that debit still outpaces credit in terms of volume here in the U.S.
That preference has reshaped incentives. Retailers and payment providers are doubling down on debit rewards while incorporating alternatives such as expanding buy now, pay later for payments from companies including Affirm and Klarna. For Venmo, tying heftier rewards to behaviors such as direct deposit is not mere generosity — it’s a retention play. Deposits reduce funding costs, lead to higher balances and create increased transaction frequency throughout the app.
Competitive fintech pressure intensifies across payments
Venmo’s move comes into a crowded playing field. Cash App’s offers tied to bank debit have long been a draw for its Cash Card. Neobanks have tested merchant-funded deals and localized promotions. Old-school issuers, meanwhile, continue deploying credit card rewards to defend share. Stash is Venmo’s attempt to thread the needle — combining the growing popularity of debit with the higher-impact marketing economics of a brand partnership.
The package model also introduces strategic flexibility. Venmo can rotate brands, highlight seasonal campaigns and strike custom rates without rewriting category rules. That’s attractive to advertisers hungry for performance-based spend and a platform that can prove out the measurable lift in visits, order values and repeat purchases.
What users and merchants can expect from Stash
For users, the headline rate of up to 5% is enticing, but it’s complicated — there are homework assignments, like turning on direct deposit, setting up auto reloads and choosing the appropriate brand bundle. The payoff is cold hard cash back, not points or miles — which strikes a chord with debit-first users who value instant point-of-sale gratification.
Stash provides merchants with CRO (conversion rate optimization) baked in and targeted access to a high-frequency audience. Rather than spending for general awareness, brands can now finance incentives that incentivize a particular action — a first Uber Eats order or a return visit to Walgreens. With in-app payment rewards added, merchants could then capture both card-present and in-app spend via a single route with Venmo.
The bottom line on Venmo Stash and debit cash back
Venmo’s debit cash back program is not so much about replicating credit card rewards as it is about rewiring loyalty around the app’s ecosystem. By anchoring the highest earnings to its mainstay of direct deposit and encouraging people to opt in to brand bundles, Venmo has knit together payments, advertising and engagement in a manner that reflects how Gen Zers and younger millennials already spend. If it can keep up with execution and merchant supply, Stash could be a significant wedge in the debit rewards race.
