Cashback campaigns - only with a ZAG license
Cashback campaigns are a popular marketing tool for companies. Companies often hire marketing agencies to carry out the campaigns. Often those service providers not only design the cashback campaign but also pay out the cashback amounts to the end customers. When operating within this scope agencies often unwittingly provide financial transfer transactions. According to the Payment Services Supervision Act (ZAG) such a transaction can only be carried out by licensed payment service providers. As a consequence the BaFin can impose fines or even shut down the business operations of the marketing agencies that operate payments. Involving a payment service provider often represents a great effort for companies and agencies in terms of process and time. This is where secupay comes in and supports with a simple "ready-to-use" cash-back solution.
About cashback campaigns
For businesses cash back promotions are an effective way to say “thank you” to loyal customers, attract new customers and increase shopping cart content at the same time. The cashback principle, in English "refund" or "cash payment", is basically very simple: If a customer buys a cashback product, he is reimbursed a certain value of his purchase as a "money back campaign". The corresponding amount is either credited directly to his customer account and can be used for subsequent purchases, or it is paid out in cash or to his bank account. Companies often cooperate with specialized marketing agencies when carrying out cash-back campaigns, which often also handle the payment of the small amounts as part of the cooperation. With this agencies provide financial transfer transactions, which according to the Payment Services Supervision Act (ZAG) should only be carried out by licensed payment service providers - and this can be fined by BaFin.
What are financial transfer transactions?
The Payment Services Supervision Act (ZAG) defines a financial transfer business in Section 1 Paragraph 1 Sentence 2 No. 6 "the services where, without a payment account being established in the name of the payer or the payee, a sum of money is received from the payer solely for the purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee, or where the sum of money is name of the payee and made available to him (money transfer transaction)".
The definition is so broad that numerous business models fall under financial transfer. In highly simplified terms, the paragraph says the following: It can be assumed that every money transfer of "foreign" money to third parties in a triangular relationship of payer, payment service provider and payee represents a financial transfer transaction. With many cashback campaigns these are: the advertising company, the marketing agency and the end customer. The agency provides a money-back payment to the end customer with "foreign" money - that of the manufacturer company. According to the guideline cited above, however, a ZAG-licensed payment service provider must be consulted to ensure the necessary security and legality of the processes. In this context, secupay provides an immediately usable payout solution to carry out ZAG-compliant cashback campaigns.
The practical secupay solution for cashback campaigns
As a BaFin-certified payment provider secupay AG has many years of expertise in the professional processing of large transaction volumes. Companies and marketing agencies that are faced with the challenge of "ZAG-compliant money repayment" receive quick and uncomplicated help: The start is stright away after simple onboarding and identification. The marketing agency compiles the payout data. These can easily be transferred in form of a csv file via the secupay interface or the secuOffice web portal. After the data have automatically been checked, the payment occurs – error-free and legally compliant. In secuOffice, agencies and companies can find an overview of all payment transactions with the relevant details such as date, amount, recipient information and individual transaction code at any time. This information can be downloaded as a csv file and further processed offline. The solution can be used without technical integration and therefore allows a quick start into the project after onboarding. The price calculation is based solely on the number and amount of transactions carried out and does not require any fixed costs. secupay provides it service already for well-known customers who were looking for a reliable and fast solution for their cashback payment processes, including a giant in the confectionery industry and a well-known manufacturer of hygiene products.