In the ever-evolving landscape of financial technology, or fintech, the array of rewards offered to consumers through various platforms can be both enticing and complex. From digital gold to cryptocurrencies like Bitcoin, the options seem boundless. Here, we delve into the offerings of two prominent fintech entities, shedding light on the rewards, taxation implications, and potential risks associated with their services.
ANQ Finance
Partnering with Pine Labs and YES Bank, ANQ Finance provides consumers with a range of cards, from prepaid to credit. The rewards are offered in the form of digital gold and Bitcoin, allowing spenders the flexibility to choose their preferred option. These rewards, though held in the firm’s name, are assigned to users via the app. Additionally, spenders can convert their digital assets into discount vouchers for direct-to-consumer brands, or even physical gold once a certain threshold is reached. However, concerns arise regarding taxation and bankruptcy protection. While assets converted to digital vouchers may be considered non-taxable rebates up to ₹50,000, the fate of investors’ digital assets in the event of the fintech’s bankruptcy remains uncertain.
GoSats
In collaboration with LivQuik, GoSats offers a prepaid card option, with rewards provided in the form of satoshis (Bitcoin) and digital gold. Similar to ANQ Finance, rewards are held in the firm’s name but assigned to users on the app. Spenders can convert their digital assets into discount vouchers or physical gold upon reaching specific thresholds. Notably, the platform also allows users to reload existing prepaid cards by selling assets, adding a layer of convenience to the process. However, concerns persist regarding taxation, particularly when assets are sold for cash in a bank. While converting assets into digital vouchers may offer tax relief, the absence of clear guidelines from the RBI on reward types adds uncertainty to the regulatory landscape.
As consumers navigate the labyrinth of fintech rewards, it becomes imperative to weigh the benefits against potential risks. While the allure of earning cryptocurrencies as rewards may incentivize increased spending, the lack of clarity surrounding taxation and investor protection underscores the need for enhanced regulatory oversight. As the fintech industry continues to innovate, stakeholders must remain vigilant in ensuring consumer protection and financial integrity in this digital age.
