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S’pore cashback startup ShopBack makes foray into payments space with recent ShopBack Pay launch

shopback pay

Homegrown cashback rewards platform ShopBack recently marked its first foray into the payments space with its latest ShopBack Pay feature.

It’s essentially a QR scan-and-pay feature that enables ShopBack users to not only enjoy cashback online, but also offline at merchants with physical stores.

With ShopBack Pay, consumers can now link their favourite payment methods and easily make in-store purchases, as well as stack additional cashback on top of rewards from their selected payment method.

“Our goal at ShopBack has always been to add value to and shape one’s shopping experience with ShopBack Pay, right from the start when users easily discover merchants on the app to making their payments with cashback as a loyalty scheme,” said Julian Foo, Head of Payments at ShopBack. 

“With the launch of ShopBack Pay, we are able to deliver convenient and rewarding payments to users, and subsequently create a holistic online to offline shopping experience for users.”

How does ShopBack Pay work?

With ShopBack Pay, users are not required to top-up any funds. Instead, they can simply link their preferred payment method (Mastercard, Visa or GrabPay) on the app so they can easily make in-store purchases.

shopback pay
ShopBack Pay offers “highest cashback guarantee” / Image Credit: ShopBack

Users can enjoy five per cent cashback from ShopBack Pay merchants on average, though some popular merchants offer 12 to 20 per cent cashback.

According to ShopBack, it guarantees the “highest cashback” and promises to refund users the difference if they are able to find higher cashback offers elsewhere.

On top of cashback offered by ShopBack Pay merchants, users will also get to enjoy rewards from their preferred payment methods such as earning credit card miles, cashback benefits and GrabRewards points.

“Cashback earned on ShopBack is actually real cash. Users can easily withdraw it into their bank accounts or use it to offset their next purchase with any ShopBack merchant,” explained Julian.

“Additionally, if users link all of their favourite payment methods to ShopBack, it provides them with added convenience of not needing to struggle to find that card or app to make a payment at our merchant partners.”

Growing their pool of merchants and users

ShopBack first rolled out the pilot launch in January 2022, which received great user response.

“We are seeing some really encouraging repeat usage, especially at places that traditionally do not provide cashless payments [such as] hawker centres and heartland merchants.”

“In the last three months, we have seen close to a 200 per cent month-on-month growth in new customer adoption. This is also how we have been able to grow our base group of merchant partners from over 1,000 to over 3,000 in the last two months.”

Essentially, it has tripled its pool of merchants, including notable brands like Famous Amos, CHICHA San Chen, Krispy Kreme and more.

shopback pay
ShopBack Pay is accepted at over 3,000 merchants / Image Credit: ShopBack

To further drive the use of ShopBack Pay, ShopBack has partnered with Grab so its users can maximise the cashback benefits and rewards from both platforms. Users not only earn cashback from ShopBack Pay merchants, but also reap additional benefits such as GrabRewards points.

Julian described the partnership with Grab as “natural” since it is a popular payment solution in Singapore, and can therefore help to enhance the incentives for its users on a larger scale.

As part of its onboarding initiative, ShopBack is offering a S$2 bonus cashback on users’ first ShopBack Pay transaction linked to GrabPay, until May 31.

During this same period, all ShopBack Pay users will also receive 100 per cent cashback (capped at S$5) on their first transaction, with a minimum spending of S$5.

Shaking up the payments and e-commerce landscape

Despite its recent foray into the payments space, Julian assured that cashback rewards still remain ShopBack’s core business model.

In fact, its online affiliate and voucher features have delivered close to S$20 million in cashback value to Singapore users in the last year alone.

“This is the value we have been giving to shoppers and moving forward, we are only looking to deliver more cashback with the launch of ShopBack Pay,” said Julian.

He added that ShopBack has multiple business lines growing in Singapore, which explains the company’s rapid expansion. From being a purely online marketing business, it has expanded its solutions into vouchers and now payments, as it discovers more ways for customers to shop with, and through, ShopBack.

“The key challenge is ensuring that we are able to communicate all these product lines to the user in a seamless and personalised fashion. It is a good problem to have!” quipped Julian.

When it comes to personalisation, one solution that they have come up with is showing a customer cashback deals that are relevant to them based on the proximity of their current location.

shopback hoolah
ShopBack acquires BNPL firm hoolah / Image Credit: ShopBack

As part of its fintech strategy, ShopBack also made the move to acquire Buy Now, Pay Later (BNPL) firm hoolah last year for an undisclosed sum.

Julian shared that they are currently building upon the existing infrastructure of hoolah for a better shopping experience for both customers and merchants.

Additionally, they are engaged with the Monetary Authority of Singapore (MAS) and other BNPL players on an industry-led initiative that will develop a BNPL framework for the local market.

“ShopBack doesn’t intend to reinvent the wheel”

Since its inception seven years ago, ShopBack has grown from a small team of six to over 700 today, and is now serving over 30 million shoppers across 10 markets.

Additionally, ShopBack has helped power over US$3.5 billion in annual sales for over 10,000 online and offline merchant partners.

These are impressive numbers, considering how Covid-19 has posed as a huge stumbling block for the growth of many other companies.

Julian acknowledged that many businesses have been affected by the pandemic, but he sees it as a burgeoning business opportunity for ShopBack.

Julian Foo, Head of Payments at ShopBack
Julian Foo, Head of Payments at ShopBack / Image Credit: ShopBack

“With more consumers turning to e-commerce over the past few years, ShopBack is well-positioned to leverage on and facilitate this trend,” he explained.

“Similarly, we were able to leverage the rise in the adoption of digital payments and make our first foray into the payments space with ShopBack Pay. The shift in consumer behaviour due to Covid-19 has also pivoted our brand’s strategies to be more streamlined with their ever-changing habits.

He also observed that the current payments landscape is indeed crowded, he sees it as a “good thing” for consumers. “The power of choice is something consumers and merchants should leverage on.”

“ShopBack doesn’t intend to reinvent the wheel, but rather, to add value to consumers and merchants alike by providing more value-added services such as the ability to use their cashback on merchants and delight them when they shop with us.”

“This is why with ShopBack Pay, we aim to make it at the top-of-mind recall for shoppers through consolidating and allowing them to enjoy all the benefits of the various e-payment solutions, all on a single platform.”

Sharing other future business plans, Julian revealed the company’s plans to roll out ShopBack Pay in many of its existing markets in the next six to 12 months, as well as expand ShopBack to a “few more new markets” this year.

Featured Image Credit: ShopBack

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