Venmo launches stash rewards program with tiered cash back benefits

SAN JOSE - Venmo introduced a new rewards program called Venmo Stash on Monday, offering tiered cash back benefits that increase as customers engage more deeply with the platform's services.

The program rewards Venmo Debit Mastercard users with cash back that automatically deposits into their Venmo balance monthly. Users start with 1% cash back on purchases made with their Venmo balance, which increases to 2% when they enable auto-reload features, and reaches 5% when they receive at least $500 in direct deposits monthly.

Venmo Stash also allows customers to select from curated bundles of retailers, restaurants, and on-demand services to earn up to 5% cash back when using their Venmo Debit Card at these merchants.

According to a company press release, the program is designed to incentivize greater engagement across Venmo's expanding suite of products and services, which has evolved beyond peer-to-peer payments into a broader commerce platform.

"Traditional rewards programs make customers work for points they may never use. Venmo Stash flips that model," said Diego Scotti, General Manager of Consumer at PayPal, Venmo's parent company. PayPal, currently trading at a P/E ratio of 13.3, is considered undervalued by InvestingPro analysts and boasts a perfect Piotroski Score of 9, indicating strong financial health. The company has been aggressively buying back shares while maintaining a solid market position.

The program is currently available to Venmo Debit Card customers, with plans to expand next year to include additional rewards for customers who pay with Venmo at participating merchants nationwide.

The Venmo Debit Mastercard is issued by The Bancorp Bank, N.A., and the rewards program has a maximum cash back limit of $100 per month, according to terms outlined in the company's announcement.

In other recent news, PayPal reported its third-quarter results, revealing an adjusted earnings per share of $1.34, surpassing the consensus estimate of $1.20. This performance was attributed to stronger lending revenue, effective expense control, and a favorable tax rate. Following these results, several analysts adjusted their price targets for PayPal. Keefe, Bruyette & Woods raised their price target to $90, citing growing momentum, while TD Cowen increased theirs to $80, despite noting a mixed fourth-quarter guidance. Compass Point also adjusted their target to $66, maintaining a Sell rating. Mizuho Financial Group maintained an Outperform rating with an $84 price target, highlighting PayPal's partnership with OpenAI as a significant factor in recent positive market reactions. Additionally, PayPal has launched its interest-free "Pay in 4" buy now, pay later option in Canada, allowing consumers to split purchases into four payments over six weeks. This service is available at numerous online retailers, including Knix, Samsonite, The Home Depot Canada, and Ticketmaster.

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