Bank incentives get the chop as ING Direct dumps two per cent cashback deal

CASHBACK incentives are quickly disappearing as financial institutions play scrooge on giving out rewards to customers.

Banks are slowing removing cashback incentives on everyday accounts for customers.

CASHBACK incentives are quickly disappearing as financial institutions play scrooge on giving out rewards to customers.

ING Direct’s popular cashback deal was rolled out four years ago and is the latest incentive to be dumped, with many customers missing out on significant savings by simply using “tap and go” at the checkout.

It has cost the bank a whopping $37 million in cashback to customers since 2014 when the offer was cut from five per cent to two per cent for making contactless payments.

For ING Direct customers today this means for spending $100 using paywave they are reimbursed $2.

The deal will end on September 30.

The email sent to ING Direct customers telling them about the cancellation of the deal.

One ING customer who recently switched her home loan to the bank said the cashback was a “real selling point” and was disappointed it is being withdrawn.

Another institution, ME, also offered a five per cent cashback incentive for “tap and go” purchases but dumped the offer last year.

Banks continue to argue their profit margins have been squeezed and this is likely to continue with the cash rate at an historical low of 1.75 per cent — there’s strong predictions it will fall again when the Reserve Bank of Australia board meets next week.

ING Direct’s head of product Tim Newman said the decision to end the offer the bank meant the bank could continue to focus on other customer incentives including “free access to any ATM, anywhere in Australia, no monthly account fees, the app experience and our 24/7 customer care.”

ING Direct head of product Tim Newman. Picture: Supplied.

Financial comparison website Mozo’s spokeswoman Kirsty Lamont said these types of cashback incentives are continuing to disappear as banks’ tighten their belts on spending.

“These sorts of incentives are bought in by the banks to encourage use of new types of technologies, but once consumers become aware of these features and use them regularly the banks feel less inclined to offer these incentives,’’ she said.

“Banks are definitely being squeezed at the moment so they need to be careful about where the offer incentives.”

Kirsty Lamont is the spokesowman for comparison site Mozo and can give tips and advice on everything from home loans to credit cards and electricity bills. Pictured in Sydney CBD.

According to Mozo’s database the only other institution to offer cashback “tap and go” incentives is Australian Military Bank which gives customers two per cent back for making contactless payments.

Lamont said banks would be more inclined to offers deal where they can make more profits, for example from home loan incentives instead of offers with daily transaction accounts.

About three in five Australians use their cards to make “tap and go” purchases.