Strike Announces Cash Back, Letting Merchants Pass On Lighting Network’s No-Fee Benefits
Strike, the application from Zap that lets users transact through the Lightning Network using their debit card or bank account, is now offering cash back rewards, according to an announcement that founder Jack Mallers shared with BitcoinLinux.
“Today, we are releasing Cashback by Strike, our first Strike Rewards program,” Mallers wrote in the announcement. “Cashback is about as conceptually simple as it gets. You simply scan, confirm, and earn cash that is instantly available in your Strike account.”
As with its Strike product in general, the Zap team emphasized the ease of use behind this product as its most attractive feature.
“It’s a win-win really,” Tom Kirkpatrick, a software engineer with Zap, told BitcoinLinux. “Our partnered merchants now have a way to directly incentivize users to pay in bitcoin, and the users don’t even need to know that they are in fact paying in bitcoin because in Strike, that complexity is hidden from them.”
Though it should be fairly simple for users to leverage, the new feature requires some extra handling by the Strike team.
Strike will mark the cash back rewards associated with a partner merchant’s Lightning public key, which serves as a unique identifier. When a user scans a QR code, as outlined in the video above, Strike will decrypt the invoice, scan the public key and display any rewards for the user. The user will get their reward payment immediately into their account after their purchase, and the merchant settles with Strike behind the scenes.
In general, Strike enables Lightning payments without having users touch bitcoin or its complexities by purchasing the BTC for them and transacting it through Lightning on their behalf. For the cash back program, the process works similarly but in reverse: merchants pay Strike the reward back in BTC and Strike then sells that BTC for fiat and credits the user.
Mallers explained that merchants are naturally incentivized to offer cash back for Strike users because they are avoiding the large fees associated with traditional credit card transactions. While credit card processing fees can reach more than 3 percent of a transaction (or even higher for certain industries), transacting via the Lightning Network is free.
“If you are a merchant out there why would you not accept Lightning Network payments and give a reward to users to pay you over Lightning? Why pay processing fees when you don’t have to?” Mallers asked in the announcement.
Strike has launched the program with four merchants, with plans to scale up with more in the coming weeks. Strike users can earn 5 percent cash back with bitcoin-only 3D-printed products retailer CryptoCloaks, 15 percent cash back with Lightning-Network-powered videogame Lightnite, 5 percent cash back with bitcoin gift card retailer Bitrefill and 5 percent cash back with bitcoin-only apparel store BitcoinShirt.co.
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