The Truth Behind UPI Apps, Cashback, and “Fake Rewards” — A Trap for Users

In today’s digital world, especially in India, UPI (Unified Payments Interface) apps like PhonePe, Google Pay, Paytm, and others flood us with promises of cashbacks, rewards, points, and offers. But let’s face reality — most of these rewards are cleverly designed traps, not genuine benefits. The user is not the beneficiary here; the user is the product.

The Cashback Illusion: A Manipulation Tactic

Data shows that over 70% of app-based cashback offers go unused or expire unnoticed by users (Source: Business Standard, 2023).

Most UPI cashback offers are under ₹1 to ₹20 per transaction — an insignificant amount — but these micro-rewards make you feel like you're “earning,” which triggers repeated usage. This is called “gamification of payments” — tricking your brain into using the app more frequently.

The "scratch card" mechanism used by apps like Google Pay is modeled on gambling psychology — variable reward systems that keep users hooked, much like slot machines in casinos (Source: Harvard Business Review, 2022).

You Are Not the Customer — You Are the Product

Your data — spending patterns, location, habits, shopping interests — are being collected and sold to advertisers and data brokers. These companies earn in millions while you chase fake ₹5 rewards.

As per a 2023 report by The Ken, India’s top UPI platforms derive their real revenue from partnerships, ads, and lending data — not from rewarding the user.

These platforms gather deep behavioral analytics to predict what you’ll spend next — and they push offers to shape your spending — controlling your financial behavior subtly, without your knowledge.

The Harsh Truth: No Free Rewards Exist

“Cashbacks” are not generosity — they are marketing expenses. Every rupee of cashback they give is part of a growth budget designed to lock you into their ecosystem.

You think you’re earning ₹10, but the company earns ₹1000 from your data, your transaction charges (for merchants), and partnerships.

This is the new internet economy — where the user is the commodity, not the king.

The Social Responsibility Myth

These apps pretend to promote “Digital India” and “Financial Inclusion” — but this is more about app domination and market monopoly than real social responsibility.

Once they achieve market control, many of these cashback programs shrink or disappear — and you’re left locked in their system.

Conclusion: Don’t Be Fooled

The truth is uncomfortable — but necessary. These apps are not giving you money; they are buying your attention, your habits, and your privacy cheaply. We must stop falling for ₹5 scratch cards and start asking: What is my data worth? Why am I giving it away for peanuts?

In this digital society — if a service is free, you are the product being sold.