September 10, 2025
In recent years, Azerbaijani banks launched aggressive campaigns to promote cashless payments and attract customers, often offering generous cashback schemes.
Banks competed by advertising high returns on various types of transactions, sometimes as much as 5–10 percent. But today many of those campaigns are being scaled back, most visibly through reduced cashback rates, Bizim.Media informs.
Why is this happening?
According to Akif Nasirli, chairman of the Center for Liberal Economists, the rollback of cashback programs can be explained by several factors:
Regulatory pressure and rising costs.
New rules on payment systems, digital banking, and card infrastructure have increased operational expenses for banks. To offset these costs, banks are trimming their marketing budgets and discontinuing costly cashback promotions.
Shifts in competitive strategy.
High cashback offers initially served as a tool to rapidly build customer bases. Now that growth has stabilized, banks are shifting focus toward service quality, mobile apps, and credit products. Meanwhile, merchants—who often shoulder the real cost of cashback through transaction fees—are increasingly resistant to bearing the burden.
Abuse and fraudulent use.
Some customers exploited the system by conducting fake purchases to generate cashback, such as buying items at a partner store only to return them later. Such practices led to losses, prompting banks to impose stricter limits or scrap programs altogether.
Nasirli points out that in most countries cashback campaigns are limited to specific categories such as supermarkets, restaurants, or fuel stations. Azerbaijani banks appear to be moving in the same direction, replacing mass, high-percentage cashback with targeted and capped offers.
Once a marketing tool to attract customers, cashback has now become a financial liability. As a result, promotions are being scaled back, replaced in some cases with loyalty points or bonus systems.
