Cashback rewards

The Cashback Reward System enables <<glossary:PayCredit>> clients to offer cashback incentives to customers based on eligible transactions. This component tracks reward balances, applies configured reward criteria, and processes redemptions as credit transactions on customer accounts.

The system supports flexible eligibility criteria, allowing cashback rewards to be configured based on transaction types, spending thresholds, merchant category codes (<<glossary:MCC>>'s) and time-based conditions.

Rewards accumulate in a dedicated reward balance, which can be redeemed manually or automatically at predefined intervals.

By maintaining a separate record of reward calculations, the system enables future expansion into additional reward models, such as third-party loyalty integrations and tiered reward structures.

Key functionalities

Cashback reward configuration

Define eligibility criteria based on MCCs, transaction types, and spending limits.
Set minimum and maximum spend thresholds for reward eligibility.
Configure reward rates (fixed amount or percentage of transaction value).
Apply limits per transaction, day, or billing cycle.

You can read more on cashback reward configuration here.

Transaction eligibility & reward calculation

Automatically detects eligible transactions based on predefined criteria.
Records cashback amounts in a pending reward balance.
Rounds reward calculations down to the nearest cent for accuracy.
Limits reward accumulation based on daily, monthly, and annual caps.

You can read more on transaction eligibility and reward calculation here.

Reward balance tracking & redemption

Maintains a separate reward balance for customers.
Ensures only settled transactions contribute to the reward balance.
Supports manual or automated redemption, converting reward balances into credit transactions.
Allocates cashback credits as standard repayments on revolving credit accounts.

Reversals & Adjustments

Handles reversals and chargebacks (future), ensuring cashback rewards are adjusted accordingly.
Maintains a detailed log of all cashback transactions for auditability and compliance.

Configuration conditions

PayCredit must process transactions before cashback eligibility is evaluated.
Reward balances are only updated for settled transactions (not pending authorizations).
Automated reward redemption should occur at the next statement cycle after processing.
Transaction eligibility is validated in real-time upon transaction authorization.

Configurable options

Configurable option	Definition
Eligibility Criteria	Define cashback eligibility based on merchant, MCC, transaction type, and spend limits.
Reward Calculation Method	Fixed amount, percentage-based, or a combination of both.
Reward Caps	Limits per transaction (future feature), day, billing cycle, or total reward balance.
Redemption Triggers	- Manual Redemption (customer-initiated). - End-of-Month Automated Credit. - Annual Redemption (Future Feature).

Example cashback reward setup


Eligible Transaction Type	Purchase
Eligible MCCs	Grocery Stores (5411), Restaurants (5812)
Min Transaction Amount	$50
Max Cashback Per Cycle	$100
Reward Calculation	2% of transaction amount
Redemption Method	Monthly automatic credit

Example cashback reward lifecycle

Customer spends $150 at an eligible merchant.
Transaction eligibility is verified (purchase, MCC, amount).
Cashback amount is calculated (2% of $150 = $3).
$3 reward is added to the customer's reward balance.
At the end of the billing cycle, $3 is converted into a credit transaction on the customer’s PayCredit account.