1. The Mechanics: How Cashback is Funded
Every time you swipe or enter your card online, the merchant pays an interchange fee (typically 1% to 2%) to the card network (Visa, Mastercard, RuPay) and the issuing bank.
Cashback cards share a portion of this fee—along with partnership commissions from merchant tie-ups—directly back with you.
2. Statement Credit vs Wallet Reward
Direct Statement Credit: The earned cashback automatically reduces your outstanding credit card bill in the next billing cycle.
Third-Party Affiliate Cashback: Platforms like Funngrow reward you with additional cash rewards when you apply through partner links, which you can withdraw directly into your bank account via UPI.
3. Understanding Category Caps and Exclusions
Most cards set a monthly maximum cap on high-earning categories (for instance, ₹1,000 max cashback per month on 5% dining).
Transactions on fuel, rent payments, wallet loading, and government taxes are generally excluded from standard cashback accrual.