What is Cash-Back

Cash-Back services enable Visa members to offer cardholders and merchants a value-added feature that is competitive with domestic card schemes in some markets. It is defined as “cash given to the cardholder at the point of sale when a purchase is made”. Cash-Back is a domestic service available to participating Visa members in the AP region for all Visa cards.
Cash-Back services enable Visa members to offer cardholders and merchants a value-added feature that is competitive with domestic card schemes in some markets. It is defined as “cash given to the cardholder at the point of sale when a purchase is made”. Cash-Back is a domestic service available to participating Visa members in the AP region for all Visa cards.

Cash-Back is an important component in helping members drive card usage. The convenience of obtaining cash at the point of sale encourages participating issuers’ cardholders to use their Visa debit cards more frequently for purchases at merchant locations - thus, increasing sales volume and potentially member profitability.

As part of the Cash-Back service, the Cash-Back amount is identified separately in authorization messages and settlement records to allow issuers to make authorization decisions and monitor cash activity of their cardholders.

Visa Cash-Back Global Success Stories
Successful domestic Cash-Back programs have been established in the UK with Visa Electron and Delta, and in the US with Visa Check Card II and Interlink.

United States
Statistics from the US Visa program illustrate that small amounts of cash are obtained with considerable frequency at poin- of-sale. At participating US merchants, one in four purchase transactions include Cash-Back. The average Cash-Back amount at the point-of-sale is US$20 as compared to the average ATM transaction of US$69. The US program has a US$200 limit on Cash-Back.

Market research has established that US cardholders place enough value on the convenience of Cash-Back at the point of sale so that they would switch banks if their financial institution stopped offering the service. Additionally, the 2002 Visa USA Debit Card Tracking Study showed that more than fifty percent of debit card owners take advantage of Cash-Back.

United Kingdom
The Visa Cash-Back service in the UK was initially limited to supermarket locations in order to tightly control and monitor the program. As positive experience was gained, the program was expanded to additional merchants. In the UK the average value of Cash-Back is £24 and occurs on average in one of every twelve purchases.

The Benefits of Offering Cash-Back Service
By offering Cash-Back to their cardholders, issuers can meet consumer demand for greater convenience and broader access to funds, enhancing brand value and cardholder loyalty. Research shows that cardholders value the convenience of Cash-Back at the point of sale, even making purchases specifically to obtain Cash-Back.

Acquirers gain a new merchant service by offering Cash-Back, helping them to retain or gain merchants, by providing a differentiated service at the point of sale. Increased sales volumes may generate higher revenues from merchant fees.

The advantages to merchants include reduced cash handling costs such as simpler cash drawer balancing and lower cash transport fees, and less exposure to employee theft as less cash remains in the cash register. In addition, the merchant gains the potential for higher sales volumes (as a purchase is required to obtain Cash-Back) and strengthens customer loyalty due to the added convenience of providing cash access at the point of sale.

Cardholders benefit from added convenience and wider access to cash at merchant locations.

How Cash-Back Works
The diagram below illustrates a typical transaction flow for the Visa Cash-Back service. The numbers in the following list correspond to the numbers in the illustration. Please note that Cash-Back services can only be provided in a card-present environment.

Step 1
The merchant may ask or the terminal may prompt the cardholder if they would like Cash-Back in addition to their purchase.
The cardholder or merchant swipes the card through the point of sale (POS) terminal or inserts it in the terminal. The purchase amount and the Cash-Back amount are entered as separate amounts into the POS terminal.
The cardholder approves the purchase plus Cash-Back amount by entering their PIN or signing the transaction receipt.
The merchant terminal sends the transaction to the acquirer with the Cash-Back amount identified separately in the message using a separate field in the authorization message - Field 61.1.
Step 2
The acquirer receives the transaction data from the merchant terminal
Creates an authorization request for Visa with the Cash-Back amount in Field 61.1- Other Amounts
Routes the authorization request to Visa.
There may be domestic solutions in place that do not use Visa for processing, but perform similar functions. Under these arrangements, the acquirer would route the authorization request to the domestic authorization processor according to its technical specifications.

Step 3
Visa receives authorization request and performs the following checks:
The acquirer and issuer both participate in the Cash-Back Service
The acquirer, issuer and merchant are in the same country
The Cash-Back amount is less than the total transaction amount
The Cash-Back amount is less than or equal to the country’s maximum Cash-Back limit.
If any of these conditions are not met, the authorization message is returned to the acquirer with a decline response code.

Step 4
For transactions routed to the issuer, the issuer takes information on the cardholder’s available funds and daily cash limit into the authorization decision. The issuer approves or declines the transaction and sends an authorization response.

Step 5
Visa routes the authorization response to the acquirer.

Step 6
The acquirer receives the response and transmits it to the merchant terminal. The terminal displays the approval response on the screen and generates a receipt for cardholder authorization that identifies the Cash-Back portion of the transaction. The transaction is then cleared and settled with Visa and the issuer.

For more information to help you market Visa’s new Cash-Back service in your country, log onto Visa OnLine.