A US based cashback app called Dosh has secured a US$40m raise, based on a US$300m valuation. Dosh has only been around for a couple of years, but has achieved crazily impressive traction in the market.

That includes 3+ million members and more than 150,000 retailers and brands signed up to its platform. Impressive indeed, for a company that was established in 2016.

The Dosh business model is simple:

• Member joins and links a credit card
• Member shops at retailers and brands connected to Dosh
• Member receives up to 10% cashback into their choice of account
• Dosh takes a clip on every transaction (although it’s unclear how much)

There are many other players in this space too, including Drop, Ebates (part of Rakuten) and Quidco in the UK.

Separately, a lot of major banks both in Australia and abroad are leveraging card-linked cashback offers which are going to gain more traction this year.

There are several reasons why these types of programs are doing so well:

1. Convenience

A card-linked offer where a user only needs to present their card to earn is the ultimate in simplicity. Think about how quickly innovations such as tap’n’go were embraced. Time remains one of our most precious commodities and companies that save time and manage to reward consumers at the same time will win.

2. Cash is still king

After 10+ years in the industry I’ve seen lots of different programs with many different reward options, many of which have significantly higher trophy value than cash. However, the sheer utility of cash remains its key benefit.

3. Market fit

The number one redemption option across both of the major Australian supermarkets remains their “2,000 points for $10 off your shop” proposition. This indicates that at least within this category (which accounts for a huge chunk of Australian everyday spending), it’s absolutely what the consumers want.

4. Instant gratification

Studies indicate younger consumers expect value straight away, and card-linked cashback offers deliver that versus more traditional, points-based accumulation programs.

That’s what makes Dosh’s rapid growth so exciting. They are applying the principles and enjoying engagement in droves. Expect lots more new entrants into this market.

Max Savransky is Loyalty Director of Loyalty & Reward Co, a leading loyalty consulting firm based in Sydney. He has 10 years’ experience within the loyalty industry including roles at Mastercard Loyalty (Pinpoint), Silverneedle (Next & Sage Hotels) and Pureprofile. As Loyalty & CRM Manager at HOYTS, he launched the highly successful partnership with Qantas Frequent Flyer, including a world-first Qantas Points in-store redemption proposition. He is an active cryptocurrency trader.

Max regularly contributes to www.blockchainloyalty.io, a global resource centre for everything blockchain loyalty.