Money from thin air. How much can you earn from cashback and who pays for the generosity?

More than 20 banks in Ukraine return a part of your spent money every month. For buying coffee, paying for the subway, ordering pizza delivery, or buying a movie ticket. This is not fiction or a Black Friday promotion – this is cashback.

The same one that most Ukrainians perceive as a small crumb, although some use it to top up their accounts, and some actively donate. It seems like a trifle, but it is from such trifles that you can accumulate 2000–6000 hryvnias in a year.

LIGA.net I figured out whether it's really possible to earn money from cashback, how to do it, and why banks offer it.

What is cashback and how does it work?

Cashback is a refund of part of the money spent, which the bank accrues for you using its card. This is a real "loyalty market" where banks compete not only for interest rates but also for the habit of customers using their card.

There are different cashback mechanics. For example, a fixed cashback is when the bank returns, say, 1% of all purchases. Category-based cashback is more profitable, where spending in a certain store, cafe, or taxi gives a significantly higher percentage.

Cashback encourages cashless payments, as banks are interested in customers withdrawing less money from ATMs. This reduces collection and logistics costs.

At the beginning of each month, the client can choose the cashback categories that will be most beneficial for them. At the end of the month, the accumulated funds can be easily withdrawn to a card. The list of categories and partners differs for each bank, so the choice depends on the clients' habits and expenses. Usually, the minimum cashback withdrawal amount is 100 UAH.

When withdrawing cashback, you must pay income tax and a military levy – a total of 23%. The bank deducts this automatically. Unlike the state program "National Cashback", banks have no restrictions on the use of the funds received.

Why do banks return money?

Banks finance cashback from several sources: marketing budget, acquiring earnings, interchange (part of the commission that the issuing bank receives from each card payment), partner activities, and other mechanisms. This is explained in PUMB.

"The economic logic is simple: to increase the frequency and volume of transactions with PUMB cards, strengthen customer loyalty, and create an additional unique advantage," the bank's press service notes.

Cashback itself, as a separate function, is not profitable for the bank. It is an expense item in the budget, says Oleksandr Demchenko, Deputy Head of the Retail Business Development Department at Credit Dnipro Bank. However, cashback effectively fulfills its role as a stimulating tool that allows the bank to increase the number of transactions, customer activity, and attract new users, he explains.

"On average, a bank's cashback costs amount to up to 1% of the volume of card transactions, but in certain promotional categories, they may be higher," he added.

Types of cashback and the maximum amount

Banks do not refund money for all purchases made by a customer. Each bank has its own list of such categories.

Monobank offers six categories: books, medicine, groceries, clothing and footwear, taxis, etc. The cashback is 1-5%, but you can only choose two categories. This cashback is provided by the bank itself. The financial institution updates the list of cashback categories every month.

Mono cardholders can also access another type of cashback from the financial institution's partners. There are already 30 categories, for purchases in which 3–15% is returned. You can activate all of them at once.

The maximum cashback amount from the bank itself is limited to UAH 500 per month, while the amount from partners depends solely on customer spending.

Raiffeisen Bank It accrues cashback for all payments made with hryvnia debit and credit cards, except for FUN and Exclusive cards. The maximum cashback amount from the bank is up to UAH 500 per month, and accumulated bonuses are stored indefinitely. You can withdraw it to any card, and the number of such transactions is unlimited. The minimum withdrawal amount is UAH 100. Raiffeisen accrues cashback for purchases both in Ukraine and abroad.

At FUIB, cashback works in several formats. The bank offers three of its own categories, including utility payments. Also, about 100 partner offers are available in the FUIB app.

A separate section in the app is the "Cashback Store." Within this program, cashback is accrued regardless of how the customer pays for the purchase. You can pay with cash or even with a card from another bank.

The main condition is to place an order through the PUMB app. Cashback is credited after the store confirms the purchase. Sense Bank offers cashback based on the principle of "the more actively you use your card, the more opportunities open up." At the start, the client only has access to two increased cashback categories, but as bonuses accumulate, their status in the program also increases.

In total, there are eleven levels here – from basic to "sensei". At the lower levels, the user can choose two out of six categories, and at the highest levels – seven out of twelve, including an additional bonus category. Thus, the program effectively ties broader cashback opportunities to the regularity of spending.

"The bank offers various promotional cashback programs for customers who traditionally use cash more often. If such customers increase the share of cashless purchases, they get the opportunity to earn cashback for daily expenses in popular categories," says the head of the loyalty program development department. Sense Bank Olena Kostenko.

The maximum cashback amount in this bank for the main categories is up to 500 bonuses per month. A separate mechanic applies to payments made via smartphone: one of the categories can bring an additional 0.5% for transactions via Apple Pay or Google Pay.

The partner part of the program also works in parallel. Every month, the bank creates a selection of stores and services where you can get discounts or increased cashback – sometimes up to 15%.

At A-Bank, cashback is available to holders of "Zelena", World Elite, "ATB", and "Bolt" cards. A client can activate any number of the 27 available partner offers, as well as choose two categories out of six within the bank's cashback program. The reward amounts vary: partner cashback is 3–7%, and bank cashback is 0.7–10%, depending on the category.

A-Bank also offers Smart Cashback – an additional refund for online purchases. It is credited only when the customer navigates to the store through the bank's application. The terms, percentages, and crediting periods may vary for different stores, so it is worth checking them before making a purchase.

At Credit Dnipro Bank, you can get cashback with the Kasta Visa Card. The financial institution periodically offers guaranteed cashback categories. In December, two such offers will be available: from December 1 to 6, cardholders will receive 10% cashback in the "Children's Goods" category, and from December 22 to 25, 3% on purchases in "Groceries and Supermarkets".

In these categories, cashback is accrued regardless of the current standard rates. The maximum reward amount in each of the New Year's categories is up to UAH 1,000.

Cashback is also offered by Globus Bank, Tascombank, Accordbank, and Crystalbank, PrivatBank, Radabank, VST Bank, MTB Bank, Ukrainian Capital, and others.