May 15th: Venmo's New Debit Rewards Test — Germany's Post Cash Now

Venmo’s Testing a Rewards Program for Its Debit Card

This one I found thanks to a buddy and some digging—Venmo’s been emailing customers with a new incentive for customers to get and use Venmo’s debit card: a rewards program. They also updated their FAQ pages about 12 days ago with T’s & C’s on a “Venmo Card Incentive” program.

Here are the details:

  • 5% Cash Back on Eligible Restaurants (up to $20)

  • 5% Cash Back on Select Merchants—Kroger, Taco Bell, Shell, Walgreens, Trader Joe's, Chipotle, CVS, 7-Eleven (up to $20)

  • 5% Cash Back on Grocery Purchases (up to $20)

  • 1% Cash Back on Everything (up to $20)

  • $10 every time you use your Venmo Card to pay bills at the following: AT&T, “Bill Matrix”, CenturyLink, Comcast, DirectTV, Optimum, Spectrum, Sprint, Time Warner Cable, T-Mobile, Verizon, Wave, Xfinity

Huge Caveat: This seems to be some sort of test or experiment— the offer details say that most deals are up to $20 and seem to end at the end of June. So, to take full advantage of the campaign, you’d need to spend $400 at restaurants to actually get the full $20 reward.

Rewards programs are a great way to boost card usage, which Venmo is certainly looking to do as a way to monetize its 40 million monthly active user base. Venmo, as an issuing partner, will probably collect some slice of the interchange fee, which is how most startups rolling out debit cards will be making money initially. Similarly, Square Cash, Venmo’s strongest competitor in the millennial demographic, has a robust Cash Boost rewards program with instant rewards. One noteworthy difference is the bill payment rewards—in surveys I’ve run, I’ve found that millennials seem to be clamoring for bill payment functionality and rewarding them for adding their Venmo Card to a recurring payment like bills is a great way to make sure your card gets used.

If Venmo rolls out a permanent rewards program, it’d be hard to pay for these rewards. But as a short term way to boost usage, campaigns like this might be a worthwhile strategy. Venmo’s on track to make $300 million in revenue this year, but with payment processing being such a tough business, they’ll need to boost that figure in creative ways.

Germany Moves On From Cash

Germany is the US of Europe—it’s historically been heavily dependent on cash. Till now. In 2018, card payments accounted for 48.6% of sales, taking a slight edge over cash (48.3%) for the first time.

The EHI Retail Institute is crediting younger German consumers for the growing trust users have in card payments. Something to be mindful of as we think about payment methods and adoption in the US—usually newer payment methods get adopted by younger people first, then spread through different age demographics.

Chart of the Day

From Juniper Research:

Funding News

Toronto-based Koho raised $42 million at a post money valuation of over $100 million. Seems to be gaining steam—120,000 accounts and has reached $500 million in annual revenue.

Job of the Day

Venmo has a few product roles open, including this one on payments