How Does Upside Make Money?

Upside is a free-to-download app that offers cashback rewards to consumers for their everyday purchases. Despite being completely free to use for most users, Upside is able to generate revenue through its merchant partnerships and by introducing an optional premium subscription service.

Upside supports a huge variety of brands and merchants across the United States. The platform offers a percentage of a given purchase as automatic cashback after an offer has been redeemed, which has proven very popular among users seeking to save money on everyday items such as food and gas.

It’s not always obvious how a free-to-download application such as Upside can afford to operate profitably if it does not charge its users a fee by default. With that in mind, this article will dive into the different sources of revenue that allow Upside to offer generous cashback rewards to more than 30 million users across the United States.

So, how does Upside make money?

Upside partners with brick and mortar businesses and creates a win-win situation between both the consumer and the business. Consumers get money back for purchasing a wide variety of items, and businesses are given more exposure via a platform that has 30 million users.

While that all sounds great, eagle eyed onlookers may see an inconsistency in the Upside business model. If the app is free to download and the platform offers financial rewards to its users, how can it be profitable?

The Upside business model primarily relies on its B2B partnerships with brick and mortar businesses in order to generate revenue. On top of charging businesses a fee in exchange for natural third-party marketing through the app, Upside has introduced several additional revenue streams that together make a profitable business model.

Before we dive into the revenue streams in more depth, here are the two main sources of revenue for Upside:

1. Merchant partnerships
2. Premium memberships or upgrades

Breaking down the revenue streams: How Upside makes money

In this section we’ll cover each of Upside’s four main sources of revenue in more depth. Hopefully this can provide you with a good understanding of the company and how it’s able to run effectively without charging its users an upfront fee.

Merchant partnerships

The Upside business model primarily relies on the number of partnerships the company is able to form. Demand for Upside is related to the utility of its rewards function, meaning that high-quality merchant partnerships are essential for attracting users. If a user is offered cashback for an everyday purchase that they’d likely be making anyway, then they’re much more likely to want to use the application.

With that in mind, Upside partners with a wide variety of businesses. However, it does place a special focus on gas stations and convenience stores across the United States. This allows the platform to serve a huge number of users, leveraging the function of cashback rewards for everyday purchases to appeal to a large target market.

The merchants that partner with Upside pay the company a fee or a percentage of each transaction that was facilitated by the app. This is the primary source of revenue for Upside.

Premium memberships or upgrades

Upside offers a premium membership option where users can pay a subscription fee for higher cashback potential. The upgraded features that come with the premium tier plan include boosted rewards percentages as well as exclusive deals. The premium membership offer represents an additional source of revenue for the platform and helps it to operate profitably without the need to charge all users a sign-up fee.

Does Upside resell user data?

Like all webpages, Upside collects user data when consumers engage with the platform. This represents an opportunity to create an additional revenue stream where the data collected can legally be resold to other companies once a user accepts Cookies or Terms and Conditions. While that may sound nefarious to some, the data is primarily used for targeted advertisements and helps to connect consumers with products that they may like.

While this can represent an additional source of revenue, Upside has remained upright in its stance not to sell user data at all. Instead, the platform uses the data that it collects to provide more accurate cashback deals for each individual user. With Upside, user engagement data provides insights for which merchants a specific user might like, and the platform then provides relevant suggestions at the top of the application.

FAQs

What is the primary source of revenue for Upside?

The main way that Upside makes money is through its merchant partnerships. Upside connects users to cashback opportunities that they might want to take advantage of, then partnered businesses will pay Upside a percentage of the transaction if the consumer decides to buy.

What is the purpose of collecting user data for Upside?

User analytics are almost universally collected by web pages and web applications. Upside uses the data to provide relevant cashback opportunities to its own users, which helps to improve the user experience. While many free-to-download applications do resell user data for the purpose of targeted advertising, Upside strictly uses its data analytics to improve the in-app experience as opposed to creating an additional source of revenue.

Is Upside free to use?

Upside is free to download, and most users can take advantage of all the cashback benefits the platform offers without needing to pay a dime. However, the platform does offer a premium subscription service where boosted rewards are available in addition to exclusive perks and offers. 

The bottom line: How can Upside be a profitable business if the application is free to download?

As the number of people who own a mobile phone is now 6.93 billion — 85% of the entire global population — free-to-download applications have become the norm. The level of competition on the app store means that most businesses want to keep entry barriers as low as possible, and so they need to find alternative methods for monetization that go beyond a pay-to-use model.

Upside differs from many free-to-download applications in that it does not place advertising revenue at the core of its business model. Instead of supporting in-app ads and/or reselling user analytics data to third parties, Upside relies on its merchant partnerships to monetize its service. For each transaction that has been facilitated by Upside, partnered merchants will pay Upside a percentage.

To learn more about how other free-to-use applications make money, check our articles covering how WhatsApp makes money and how Zelle makes money.