Only a few people know that the concept of ‘cashback’ is not entirely new. It has been around since the 1980s when a financial services company first started offering cashback to its credit- card holders. However, the entire meaning of cashback has now been revolutionized and has become one of the leading marketing strategies of online payment portals.
Whether you are ordering food online or booking a movie ticket, you probably got some cashback on all your transactions. Even the mobile data pack you are consuming to place these orders also offers you some exciting discounts. But how are companies able to provide you with slashed prices on all your orders and bookings?
So, what is the truth behind cashback? How do they benefit e-commerce businesses? Are they a win-win for all? Read on to know all about cashback and its perks!
How Cashbacks Work?
For every transaction that takes place through cashback portals, there is a commission offered by retail partners. And while the merchants benefit from a wider user base, cashback portals earn money whenever a consumer places an order. Today, the affiliate marketing industry in India is estimated to be around USD 96 million and is growing at a rate of knots.
Benefits to e-Commerce Platforms
Cashback portals collaborate with many organizations, majorly e-commerce giants, that can help drive their sales. So, when a consumer places an order through the cashback website on a partnered retailer site, they are provided with an additional cashback offer on top of all the discounts initially offered by the retailer. This makes the entire deal a lot more fascinating for the consumers, adding up to the overall sales of the e-commerce platform while also building a stronger bond between the brand and the consumer. This has turned out to be a massive market of its own. Affiliate marketing contributes to around 15% of the total sales across different online retail portals in India.
Benefits to Consumers
Now that we know how e-commerce platforms and cashback portals benefit from cashback, let us also learn all the perks. As discussed earlier, cashback portals earn a commission on each transaction. This commission is further distributed among their users in the form of cashback. These are real bucks that can be transferred to the consumer’s bank account. Usually, portals have a minimum amount that needs to be reached before users can withdraw their funds. You can also use this amount for shopping purposes, gift vouchers, or discount vouchers that the website’s affiliated retail partners offer.
For instance, when you choose to make your transactions with the Fave India scanner, you get instant cashbacks, which are directly transferred to your account. It’s a secure, safe and seamless application that makes the intricacies of online buying so much easier.
Future of Cashback Portals
The prospects of cashback portals seem to be quite promising in India, owing to some of the best cashback offers it has to provide. Moreover, consumers usually prefer shopping through cashback portals because of the ease it provides in comparing different brands and outlets all at once while also offering great deals and discounts. The scope for the entire industry is massive in the country, given that the performance-marketing businesses have done tremendously well in other countries. In just a few years, the cashback business in India is set to be converted into a billion-dollar industry.
Looking at all the benefits it offers, cashback truly is a win-win for all the parties involved – consumers, e-commerce platforms, and cashback websites. Moreover, cashback seems to be an even better way to incentivize consumers and keep them engaged than discounted rates, deals, and limited-time period offers. Overall, offering cashback is a fantastic concept and can be a game-changer for all online brands and businesses.