Are you wondering how to build a cashback app? Cashback apps demonstrate real value to users.
Already, there have been runaway successes such as Ibotta — with over 35 million downloads and Rakuten —with an active user base of over 12 million customers. It can prove to be a rewarding venture.
That said, cashback app development may require more steps compared to coupon app development. For instance, the cashback app needs to split commissions with its users and offer pay-outs by sending out checks, funding gift cards, or using Paypal settlements.
Another challenge is confirming that users have bought items from partners by validating their online or in-store receipts.
Given the project’s complexities, you must carefully consider the cashback app development company to hire.
Knowing how much it may cost to build a cashback app will also become critical for your financial planning and idea viability assessment.
If you are building a cashback app as a third party, you can start thinking of potential affiliate partners and stores before embarking on the development process.
Today’s guide introduces how to make an app like Ibotta that offers cashback on purchases at partnered stores. Let’s get started.
Coupon Cash Back Apps: A Market Overview
Cashback sites and apps now drive billions in sales, with retailers opening up to offer cash-back rewards as a purchasing incentive.
Building a cashback app platform means that you’ll partner with retailers and brands. Customers can make purchases directly from your cashback app and checkout from the retailer’s store. They can save offers and shop at in-store locations.
Let’s review the market size, top market players, and how a site such as FetchRewards or Ibotta works.
How Do Cashback Apps Make Money?
An internal system – built for an individual store — may pay itself by driving more sales, reducing advertisement spending, and decreasing the costs of new customer acquisitions by retaining regular shoppers.
For a third-party solution, there are various ways to generate income:
- Affiliate commission.
Cashback programs earn affiliate commissions from qualifying sales. Unlike couponing sites, the cashback app will split the commission it receives with the customer. All of the popular apps use this method. - Exclusive partnerships.
Leading platforms such as Fetch Rewards partner directly with a brand looking for more exposure for their products. For instance, the platform may introduce special loyalty programs with extra reward points to incentivize purchases.They may recommend the company’s products or give them a prominent position in the app. Sponsored partnerships may bring additional income and complement earnings from affiliate commissions. - Advertising.
The cashback app may feature ads from Ad networks such as Google Adsense and affiliate partners as text links or banner ads. Ads may offer different compensation models such as Cost Per Impression (CPI) or Cost Per Action (CPA). - Selling aggregated and anonymous data.The GDPR notes that aggregate data is non-personal, as it’s personal data processed for a statistical outcome. Since cash-back platforms deal with retail purchases, there is a lot of demand for this data. It’s used to improve the effectiveness of advertising campaigns. Large platforms such as Fetch Rewards and Ibotta sell aggregate and anonymized data.
*Due to the cost associated with maintaining and creating user accounts, a platform may introduce a maintenance fee. You can only charge inactive accounts from the users’ accumulated rewards. In a way, the fees may help incentivize customers to continue using their accounts.
How to Make a Cashback App
Let’s briefly look at the steps of how to make a cashback app such as Fetch Rewards or Ibotta. The top components of the application will include the partner’s offers, physical & online receipt reconciliation, user accounts, and payout options.
How Much Does It Cost to Make a Cashback App?
The development costs depend on several factors, including:
- Number of platforms targeted: Cashback apps that require separate iOS, Android, and web integrations may cost more. Cross-platform development can cut costs.
- Design complexity: A detailed and sophisticated app with loyalty card integration, physical receipt scanning, etc., may cost more.
- Requested features: Each additional feature to the MVP may increase costs. Consider focusing on the bare minimum at the start.
- Teams and expertise needed: Costs may increase based on the required expertise, for instance, if there is a need to hire PM, UI/UX Designer, iOS developer, Android, Flutter developers, back-end developers, QA, and DevOps.
- The team’s location and experience: You can find the best price to quality ratio in Eastern Europe.
Testing — Complex features may require more time to test.
When requesting an estimate, the development company may base its decision on the development time required with insights from past projects.
Based on our estimates, costs for a cross-platform (Flutter) version may start at $50,000, with the development taking 4 to 7 months based on the complexity, design, and functionality.
Leverage Our Experience: We Built a Digital Loyalty Program for a Retail Grocery Chain
We have experience building a digital loyalty program for a retail chain. It had the following features:
- A personal account for the grocery chain customers
- A web solution integrated with the customer’s CRM system
- Web admin panel for administrators to manage promotions easily
- Mobile apps for viewing detailed reports on bonuses
- Ability to send feedback with photos and videos
- Virtual barcode of the personal loyalty card to use in stores
Conclusion
The cashback market, valued at over $108 billion, represents huge potential for future investors. Thousands of stores are warming up to the idea of offering affiliate programs and partnering with cashback websites to drive more sales to their platforms.
Careful thought must be given to the design and development process, ensuring that you’re hiring in the right places and getting all the expertise you need.
Attract Group’s previous experience in this market suits us to bring your idea to life. You can get started by getting a free quote.
