Making best use of cash back from mobile wallets

India’s best customer acquisition strategy is cashback. That’s why most of the e-commerce companies and credit cards offer cashback to make the payment go through them so they could replace hot cash. Cash (Flow) really is king, isn’t it.

Last year I was exploring a lot of travel and credit cards. One interesting thing that I was obsessed about was cashback. Of course, who won’t like cash back? Everyone does, don’t you?

What to do with cash back?

Simple, invest them but wisely.

But how?

I made a conscious decision then that I won’t pay for anything fully. I’ll save from every penny that I spend.

  • Got a credit card that gives 1% flat cashback for every 100 rupees that I spend
    • We all forget that we have to live our day-to-day life, by that it also means we have to pay every day. By end of the month if you have spent 25,000 INR that means you have possibility of saving 250 INR flat. 250*12 = 3,000 INR 😉
  • Got add-on cards and asked my family to spend only on this card as much as possible
    • Of course, we want to have control of our family members but why not make it a common pool. Let’s assume 25,000 is spent by your parents every month, then you can save another 250 INR. Which is more than enough to pay for your parent’s monthly mobile bill with unlimited calls and 1GB Data 😉
  • Deleted all the financial apps and made most of my transactions on PayTM, PhonePe, and TapZo
    • Why PayTM, PhonePe, and BonusAppSimple, they offer good cashback for almost every transaction. Also when you link your credit card to pay then it’s double cash back. 😉 I use American Express to top-up PayTM were wallet top-up also gets reward points. (Bonus tip: Add four times 1000 rupees to PayTM via AMEX membership reward credit card, you will get 1000 bonus points in a month which is equal to 250 Rupees)
  • Reduced withdrawing cash from Bank/ATM and made sure I use only credit cards to make pay
    • Always find a high interest saving bank account to part your salary. Digibank gives you 7% interest rate on saving bank account. Park your money here until the last date of credit card and set-up an autopay three days in advance to pay to your credit card.
    • Most debit cards don’t come up with reward points, and having money in your physical wallet is of no use to gain interest also very risky to protect it.

How to make use of cash back?

It’s not advisable to have your digital wallet to be loaded with cash, as they won’t yield you any interest. So, it’s a smart decision to invest the cashback on something which grows in value.

The best interest yielding products in India are mutual funds with ~14%, but unfortunately, you can invest only in multiples of 100 in them and only from the bank accounts. By the time we plan to accumulate the cashback to 100 we would have spent it elsewhere. Cash backs are mostly not transferable to bank accounts.

Luckily, PayTM and PhonePe both of them have introduced digital goal on their platform which also yields returns linked to the gold market. The beauty of digital goal is we don’t need a locker and it can be bought as low as 1 Rupee.

Every time I get a cashback, I have made a blind practice of purchasing digital gold immediately. So far I’m so happy to share that I have accumulated more than 1000 INR on each app and it feels good.


What do you think? Is it a smart way to part your cash back. Look to hear from you.