Tuesday, 04 August 2020

Evolution of Cashback Systems: from Credit Card to Blockchain

Let’s be honest, we all love cashback. The idea that you can get a monetary reward when you make a purchase you were probably already going to make anyway is a customer’s dream. But what happens when the cashback programs get too complicated?

Keeping track of rotating programs, incentive bonuses, limits, payout dates, and all of the hidden terms and conditions is tedious. What it boils down to is the fact that you just want to be rewarded for your loyalty, and wouldn’t it be nice to be rewarded when you guide a friend to a purchase as well?

That very increased transparency you seek is being implemented right now for blockchain-based platforms. Let’s see how the blockchain helps the entire cashback system evolve.

Evolution of Cashback

The idea of cashback programs as we know them today first launched in 1986 when credit card companies started offering percentage-based rewards to entice new customers to sign up for cards. These deals seemed great; 5% back on gas/grocery/pharmacy purchases, wow!

But of course there was the fine print to consider as well. As it turns out, these programs were often coupled with higher APRs and higher fees for vendors. So although consumers had the ability to earn back on certain purchases, more often than not they lost those rewards by carrying a balance on their card at a higher interest rate.

As an example, the industry went crazy with airline rewards. When introduced, there were cards that were offering absurd sign-up bonuses in the form of points (50,000, 100,000, and more) just for signing up for a new card. How could anyone resist?

But the nitty gritty details of these amazing deals were that someone was paying (as someone always pays), and it usually wasn’t the credit card companies. These “amazing” deals came with annual card fees, high interest rates, and point systems that were difficult to use. For instance, it wasn’t uncommon that you’d sign up for a card with a 50,000 bonus-point reward, but each flight would cost you 30,000 points. So you’re 10,000 points short if you want to get two fights — but don’t worry, the credit card company is generous enough to sell you more points.

But there may be a fix for these increasingly complex reward systems.

Blockchain is a buzzword, but that doesn’t detract from its usefulness as a technology. It typically goes hand in hand with transparency, thanks to decentralization and lower costs on average for all parties involved.

The key phrase here, though, is “on average”.

Blockchains give us a level playing field since you can reduce the total number of middlemen in a transaction; meaning that costs, or profits, can be more easily shared directly between all parties involved.

Cashback Rewards, Decentralized

There are several companies right now doing many different, diverse, and creative things with blockchain technology. Naturally, it would come to the point where companies delve not only into cashback reward systems, but take it one step further by combining cashback rewards with social media so that consumers can be both the advertisers as well as the target audience.

The basic premise of this type of blockchain-based company is:

A company hosts a cryptocurrency wallet that contains their individual token
The wallet is linked to an app that allows users to validate specific products they’ve purchased and get a cashback reward directly into their wallet
After the purchase is complete, it is added to a feed that “followers” and “friends” can view
If a purchase in the feed is used to make a similar purchase by your friend/follower, you both get rewarded.
However, this example is much easier to see in motion, so we will use two different blockchain companies to explain the finer points: Sessia and Fluz.

Sessia combines a marketplace with a social network in one unique app, enabling customers to purchase goods and services based on their friends’ recommendations while being rewarded with cryptocurrency cashbacks anywhere in the world.

Fluz is a cashback app where people can buy digital gift cards from various brands and earn cashback rewards on their invited friends’ purchases in a global network backed by blockchain technology.


Sessia has apps for both clients and shops that are interlinked. It’s not a startup anymore, as it had $30 million turnover in 2018. The beauty of this exchange is that their consumers help give them authentic advertising when sharing a purchase on their feed with their friends. The shop decides how much of a reward both the original purchaser and their friend who makes a purchase after seeing the feed each receive.

Fluz works a bit differently than that, as they link to an existing credit card you already have, which you have to register through their app. Think of this as just a more advanced traditional cashback system that receives extra perks when your friends purchase an item you’ve shared on a feed.

Sessia leaves customers and merchants to set up the ecosystem, and Fluz brings a modern approach of the traditional cashback system that we’re all familiar with.


The Sessia wallet holds all of your tokens (known as KICKs), which are earned through referrals and cashback bonuses. These tokens can be converted to another cryptocurrency or fiat instantly after receiving them. Or, to make things even more simple, they can be used to make purchases in the future without ever having to convert them to fiat.

With Fluz, consumers don’t interact with the tokens. Their wallet is essentially managed for them on a blockchain, and once they reach a certain amount in rewards they can easily withdraw through Paypal and the like. Fluz is a one-way app, so any money earned on it can only be withdrawn, not spent within the app.

Sessia allows full control over user rewards, while Fluz aims for an easier user experience.


The feed is the key to both of these blockchain companies, but how they use them is slightly different.

With Sessia, your feed helps connect your friends and followers to new brands through both your purchase and your comment on that purchase. If a friend buys a product or a service using your post, they’ll obtain cashback, while you will get a kickback from their purchase. Actually, the kickback system can also manage deeper levels. Let’s say User One invites User Two. They are now both automatically subscribed to each other’s posts and if User Two makes a purchase using User One’s post on their wall, the former receives cashback and the latter gets a kickback from the

merchant. The seller can ramp up the number of levels of its own kickback payments, while users can increase their kickback profits by inviting more people to Sessia.

With Fluz, the feed builds a multi-level-marketing-type chain, and the larger your following base grows, the more rewards you receive. There are specific bonus reward events that involve your network of followers and friends, and any money earned has to be withdrawn instead of being spent right within the app.

Sessia bets on organic advertisement; Fluz on your following.


Cashback is the whole reason we’re here and as you may have already guessed, the style of rewards differ between these two companies. In Fluz, the overall reward percentage that you can earn is reliant on how large you can build your network. The more people in your network, the higher your potential rewards. This is great if you’re super active and willing to put in the work promoting.

Sessia takes a more laid back approach and focuses on rewarding their users who participate in genuine interactions and purchases. Your network matters, but your frequency of purchasing and recommending genuinely good products and services is more important. The shops save on advertising, and when everything is kept within the Sessia app and fueled by KICKs, everyone earns more since there are fewer transactional fees.

Network size vs. genuine interactions.

That’s how the difference between these two blockchain apps can be narrowed down. It’s clear that they are serving different audiences.

Are you an influencer? Fluz exposes the value of your thousands of followers.

Are you a simple user making knowledgeable decisions? (every one of us, essentially) Sessia is the one who could reward you for simply following your spending habits.

Plus, you have the possibility to get involved even more by becoming a Kicker. You’ll have the opportunity to connect new businesses to Sessia, curate the marketplace by approving merchants, and lead the suitable ones throughout the entire cooperation period. “Kickvard University” is the place where anyone can start their journey by working with experts and teachers from all over the world.

The Most Back for your Buck

At the end of the day, we all want to be rewarded. Cashback, airline miles, rewards, incentive referral programs, and the like are all great. But the problem with traditional systems is their lack of transparency and the fact that there are many players in the middle that lessen the overall rewards for the consumer.

Will blockchain solutions be the end-all in terms of improving cashback reward systems? Probably not, but they are without a doubt an important step in the ever-evolving process that will hopefully end with 100% genuine interactions between consumers and shops with the highest rewards possible.

By Kirill Shilov
source: hackernoon.com
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