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How Crypto Card Cashback Is Funded, and Who Pays

Most crypto card cashback is funded by the Card program itself, out of interchange, paid memberships or its own token; Bybit, for one, says it "uses a portion of that interchange fee to fund your cashback reward" (Bybit). The fourth option, having someone else pay, is the only one that doesn't sit on the program's own books.

This post works through the numbers for each funding source, using what Card programs publish about themselves. It's written for the people who own a crypto card's P&L: product, growth and finance leads deciding what cashback they can afford to promise.

The interchange math

Interchange is the fee the merchant's side pays the card issuer on each purchase. It's the default source of cashback on any card, crypto or not.

On a crypto card it's rarely enough. Many crypto cards are debit or prepaid, and in the European Economic Area Regulation (EU) 2015/751 caps consumer debit interchange at 0.20% of the transaction (0.30% for consumer credit). In the US, Regulation II caps large banks' debit interchange at 21 cents plus 0.05% of the transaction, plus one cent for fraud prevention (Cooley). That cap only binds banks with $10 billion or more in assets, so many crypto card issuers sit outside it, but it sets the tone for US debit.

Here is what that means for $500 of card spend:

Scenario Interchange earned Cashback at 1% Gap the program funds
EEA consumer debit at the 0.20% cap $1.00 $5.00 $4.00
EEA consumer credit at the 0.30% cap $1.50 $5.00 $3.50
Uncapped card, illustrative 1.5% interchange $7.50 $5.00 None; $2.50 left before the issuer's share

The Card program rarely keeps all of the interchange either. The issuing bank takes its share first, and none of the programs quoted below publish how the rest is divided. So the real gap on a capped card is wider than the table shows.

This is why "up to 10%" cashback headlines always come with conditions. The difference has to be paid from somewhere else.

Four ways crypto Card programs pay for cashback

Funding source How it works Published example What it costs the program
Interchange A share of the fee on each purchase goes back to the cardholder Bybit says it funds cashback from "a portion of that interchange fee" Margin on every transaction
Token programs Higher rates for holding or staking the program's token; cashback paid in that token Bybit ties its top rate (up to 10% at its Elite tier) to holding MNT; Nexo pays 0.5% to 2.0% in NEXO tokens in credit mode, depending on loyalty tier (Nexo) Token emissions and sell pressure
Paid memberships The cardholder pays a fee or stakes funds for a higher tier Crypto.com Plus costs $4.99 a month (or a $500 CRO stake for 12 months) for 3.5% back, against 1.5% on the free tier (Crypto.com); RedotPay pays 3% only to Pro members, capped at 18 USDs a month (RedotPay) Lower when the fee covers it; the fee filters out most cardholders
Third-party funding A merchant or a crypto Platform pays the cashback to reach the cardholder Card-linked offer networks such as Kard (merchant-funded); Platform-funded cashback Nothing

Most cards combine the first three. A base rate funded by interchange, a higher rate behind a token or membership, and a cap that stops the expensive cardholders from costing too much. KAST is unusually explicit about the funding: its AI Card cashback programme is "provided and funded solely by KAST" and is not funded or guaranteed by the card issuer or network, per its programme terms.

Why self-funded cashback keeps getting cut

When the program pays, cashback is a budget line, and budget lines get trimmed. Three recent examples, each from the program's own pages:

  • Bybit Card, from October 5, 2026: cashback "will only apply to eligible transactions funded with cryptocurrency," and the 100% subscription cashback ended for non-VIP Tier 2 Beta users (Bybit announcement, September 24, 2026).
  • OKX Card (EEA): a September 2026 promotion that raised the non-VIP monthly cap from 50 EUR to 100 EUR is marked "Offer has been fully redeemed" (OKX FAQ).
  • KAST: AI Card cashback runs in bands, 10% on the first $1,000 of monthly eligible spend falling to 0% above $50,000, and gambling, betting and lottery merchants are excluded (KAST terms).

None of these programs did anything wrong. They hit the limit of what interchange and token budgets can carry. The cardholder still sees a cut. The full rate comparison is in crypto card cashback rates compared.

Third-party funding: the only model off your books

When someone else pays, the cashback stops being a cost to manage and becomes a feature to ship. There are two versions.

Merchant-funded offers. A brand pays for cashback on purchases at its own stores, and the issuer takes a share. It's well proven at US banks. On a crypto card it earns only at participating merchants, and those merchants have no special interest in crypto cardholders. We cover it in detail in merchant-funded rewards for crypto cards.

Platform-funded cashback. A crypto business that wants card spenders as customers, such as a trading venue or a prop firm, pays cashback on every settled spend. The cardholder claims it into an account on that Platform, as the Platform's own credit. The Platform pays only when a cardholder claims, which is why it can afford to pay on spend anywhere. The money comes from its acquisition budget, the same one that pays affiliates today (see crypto exchange user acquisition beyond affiliates).

The trade-off is honest and worth stating. Interchange-funded cashback is cash, or close to it. Platform-funded cashback is credit on a Platform, and it's only worth something to a cardholder who uses that Platform or will open an account there.

Questions to put to your own cashback budget

Before you set or change a rate, answer these with your finance lead:

  1. What does interchange actually return per $100 of spend after the issuer's and program manager's share?
  2. How much of today's cashback is paid in your own token, and what happens to the rate if the token halves?
  3. What share of cardholders reach the cap, and what share pay for a membership?
  4. If you cut the rate tomorrow, which cardholders would notice, and would any of them leave?
  5. Is there a third party that already pays to reach these cardholders?

Question 5 is the one most programs skip. For a crypto card, the answer is usually yes.

Where Fanback fits

Fanback is the Platform-funded option. Every settled card spend earns cashback from 10+ crypto Platforms, each claimable on its own Platform. The Platforms pay every dollar of it.

Run the same $500 through it. At a 1% rate, the cardholder earns $5.00 on each Platform that's active for them. The Card program's cashback expense is $0.00, and the cashback stacks on top of whatever the program already pays from interchange.

  • You add one screen: a balance per Platform, claims and statuses, in your app and your brand, on our API (see the module).
  • Claims and checks are run by Fanback. Wrong usernames go back to the cardholder to fix.
  • Unclaimed cashback expires after 90 days and costs the Platform nothing.
  • Platforms get an account and an amount, never card details or transactions.

What it isn't: a replacement for your own rate. It's credit on crypto Platforms, so it adds a line for cardholders who use them and nothing for those who don't.

Frequently asked questions

How do crypto card companies pay for cashback?

Mostly out of interchange, the fee merchants' banks pay on each purchase, topped up by token programs and paid memberships. Bybit says it funds cashback from a portion of interchange. Some programs, like KAST, state that the cashback is funded solely by the program.

Why do crypto cards require staking for higher cashback?

Interchange alone can't pay for high rates, especially in the EEA where consumer debit interchange is capped at 0.20%. Requiring a token stake or a membership fee limits the top rate to cardholders who bring something back, such as demand for the token or a monthly fee.

What is interchange on a crypto card?

Interchange is the fee the merchant's side of the payment pays the card issuer on each purchase, set by the card network within any legal cap. A crypto card on Visa or Mastercard rails earns it like any other card. In the EEA it's capped at 0.20% for consumer debit and 0.30% for consumer credit.

Why are crypto card cashback rates going down?

Because most of it is self-funded, and budgets tighten. Bybit narrowed cashback to crypto-funded transactions from October 5, 2026, and an OKX Card cap promotion in September 2026 ran out of budget. When the program pays, rates follow its margin.

Can a Card program offer cashback without paying for it?

Yes, when a third party funds it. Merchant-funded offers do this at participating stores. Platform-funded cashback does it on every settled spend: crypto Platforms pay, cardholders claim on each Platform, and the program's cashback expense stays at $0.00.

The bottom line

Interchange was never designed to pay for 3% to 10% cashback, and on a capped debit card it pays for well under 1%. Everything above that line is a token budget or a membership fee wearing a cashback label, and the 2026 cuts show how quickly those run out.

The durable move for a crypto Card program is to keep its own rate at what interchange can carry and let a funder who wants its cardholders pay for the rest. If you want to see what that looks like in your app, start with the module.

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