By now, you’ve probably heard of the “cashback” option on some US bank cards, which lets you buy a certain amount of money back with cash and pay with your phone number.
It’s a useful feature, and the idea of using it to earn a quick cash-back is gaining traction.
However, the concept has many drawbacks, including a lack of flexibility for merchants, a lack-lustre customer service and limited flexibility to offer it as a way to pay for goods and services.
Now, it seems the US has finally figured out the solution to its cashback problem, at least for the time being.
The Federal Reserve Bank of New York has announced a new initiative called “cash-backing for overseas merchants”, which it says will give merchants “full flexibility” to offer the cashback option.
The Fed said that with the new initiative, merchants will be able to offer cashback for “all online purchases”, from clothing to car repair.
“Cash-back options are an important part of the overall business strategy for many international merchants, and they have been a popular means of payment in countries where cash is scarce,” the Fed said in a blog post.
“The new initiative will give them full flexibility to do so.”
While the new scheme doesn’t offer merchants full flexibility, it does allow for more flexible payment options, the Fed added.
For example, the Federal Reserve said it was open to allowing cashback on purchases of up to $500 for international orders and up to 5% on international sales of up $50,000 or more.
While the Fed has yet to provide any specific details about the cash-backs offered, it’s already been said that the new service will give international merchants “great flexibility to use”.
“We are excited to partner with merchants and retailers who are committed to providing seamless, transparent, and affordable ways to earn cashback in their online and offline business,” said Paul Osterloh, director of the Federal Open Market Committee.