Online payment methods have long since established themselves as an alternative to bank transfers, direct debits and credit card billing in online retail. PayPal, Amazon Payments, Skrill and Co. outperform the classic payment methods – especially in terms of the speed of transaction processing and the simplicity of transnational payments. In addition, online payment services charge significantly lower fees than banks, especially for smaller transactions. There are also advantages such as buyer and seller protection or the protection of account or credit card data. However, the various payment methods have one thing in common: every transaction is processed via a central office, be it the bank or the provider of the online payment service.
The Bitcoin network, introduced in 2009, breaks with this basic concept of conventional payment methods and distributes its currency of the same name and the transaction database to all participating users who are connected to the system via a client. Thanks to this decentralized structure, Bitcoin is a currency system without absolute authority , which reserves the right to collect detailed user information and to store and manage it, including all payment transactions, on its own. What – and who – is behind the digital currency, which is becoming increasingly popular as a means of payment? And how or where can you actually pay with bitcoins?
Who is behind Bitcoin?
On November 1, 2008, the idea of a peer-to-peer electronic currency system – a network structure in which all participants are equal – was presented in a cryptography mailing list. The post also contained a white paper that served as the basis for the open source software Bitcoin (now Bitcoin Core) that was released the following year. Both the white paper and the software were published under the pseudonym “Satoshi Nakamoto”, whose true identity is still unclear to this day. The code of the client software has always been free and can therefore be viewed and changed by everyone. Since then, numerous users have developed Bitcoin together.
This is how the Bitcoin system works
If you want to be part of the currency network, install the aforementioned Bitcoin Core or one of the alternatives that are now available, such as Bither, Armory or mSIGNA. The respective client acts as a so-called bitcoin wallet, a kind of virtual purse for the online currency . It makes it possible to receive and send bitcoins and synchronizes with the peer-to-peer network for this purpose. Sufficient bandwidth and storage space should be available for the first synchronization, because the client downloads data with a total size of more than 65 GB . This is the shared public accounting system that forms the core of the Bitcoin network and is also known as the blockchain.
All confirmed bookings are stored in this chain, the integrity and chronological order of which is guaranteed by cryptography. Based on this information, the client calculates the balance of the Bitcoin account. However, the security concept of the open source system is not only characterized by the encryption of the data stock : Each individual transaction is given special protection in the form of a digital signature. This is automatically done when sending Bitcoins through a secret block of data– the private key (also called seed) – generated. Each user has their own private key, which is located in the wallet. On the one hand, the signature provides proof that the transaction made belongs to the respective Bitcoin address. On the other hand, it ensures that the transaction can be modified by other users after it has been sent.
In order for a transaction to be confirmed and disseminated among users, a special process called mining is required. In this processing, the transactions are signed and packed in a block and then integrated into the blockchain. This is done using special mining hardware and software, which must execute cryptological hash functions (SHA256) to create the signature and can in principle be used by any participant. In return for mining, the processor receives bitcoins, which initially sounds very lucrative. However, the hardware and operating costs are in a rather moderate relation to the income of the mining business, which is also due to the very strong competition.
Trading Bitcoins: How to get the digital currency
Mining is the source of new bitcoins and a possible way to get bitcoins to buy and sell. You can also get hold of the digital currency by accepting bitcoins as a means of payment when offering goods or services for sale. All you have to do is provide the buyer with a Bitcoin address . You can either use the address that is generated automatically when the wallet is installed or, alternatively, generate (any number of) new address codes, which are short forms of the public key. You send the respective address either in the standard form or packed in a QR code . Once the buyer has sent the agreed bitcoin amount, it usually takes a maximum of ten minutes, until you have the digital coins in your account.
You can also buy Bitcoins , whereby there are two possible ways of proceeding: You can get Bitcoins easily and without registering. You can use the search engine to find digital coin sellers, arrange a meeting and pay directly on the spot in the agreed manner. Alternatively, you can place an ad and tell the web service community that you are looking for coins. The makers of Bitcoin-Treff do not charge a brokerage fee.
Buying on special bitcoin marketplaces such as bitcoin.de is much more common. As a registered user, you can sell or buy bitcoins based on a regularly updated initial value. According to the operator, the marketplace is used by over 260,000 customers across Europe. Payment is made via SEPA transfer; Purchased bitcoins are usually credited to the wallet within one to two days – once the payment is confirmed in the seller’s bank account. Users with an account at FIDOR Bank benefit from the advantages of express trading and receive purchased coins immediately. However, the marketplaces charge (varying) fees for buying and selling. On bitcoin.
The advantages and disadvantages of the electronic money system
In order to protect the electronic payment network from possible inflation, it is built on a maximum limit of 21 million bitcoins that can be in circulation at any one time. This limit cannot be changed due to programming. According to eurosocialfiscal.org , the total number is currently almost 16 million coins (as of October 2016) and is therefore still a long way from the upper limit. On the one hand, the restriction ensures that the Bitcoin market regulates itself in the long term through supply and demand, as has been the case so far. On the other hand, the price of the digital coins is sometimes subject to very strong fluctuations, which can quickly become a problem for the seller. We summarized the pros and cons of Bitcoin:
- Inflation security : As mentioned, the Bitcoin maximum limit helps ensure that the value of the digital currency is also secured in the future. If the maximum number is reached, the production of new coins is no longer possible – unlike with ordinary, physical currencies, where there is always the option to create new units.
- Freedom of payment: In traditional currency systems, money and the state are closely linked. Bitcoin, on the other hand, can be used across countries and continents, so the means of payment does not have to be exchanged in a complicated manner. As a decentralized system, it grants its users complete control over currency units and offers no restrictions in terms of the moment or amount of payment, nor in terms of geographic distance between trading parties.
- High user convenience : Paying with bitcoins does not require a particularly large amount of effort. All you need is the destination address of the trading partner, enter the respective amount and send the sum with a click. It doesn’t matter whether your wallet is on your desktop computer, on your smartphone or online in a cloud and from which of these platforms you order a transaction. Unlike other payment methods, you as a buyer are also safe from hidden or wrongly charged transaction fees.
- Seller protection : As a seller, you not only benefit from the low costs associated with the Bitcoin network. The system also gives you a distinct advantage over traditional payment options. Thanks to the verification by the participating computer systems, Bitcoin transactions are irreversible, which makes it impossible for buyers to charge back – a problem that online shop providers in particular who are just starting out have to struggle with again and again when it comes to payment methods such as bank transfer or invoice.
- Data security : Normal payment transactions require the specification or transfer of personal information to sellers and payment services. Bitcoin users do not have to provide any information about themselves or their current residential address and also have the advantage that no central authority collects information about purchasing behavior – unlike a bank or comparable services such as PayPal, which accumulate detailed information about the transactions carried out. Furthermore, the security and completeness of the transaction information is guaranteed by the blockchain. If necessary, users can also protect the wallet with backups and encryption.
- Low costs: There are no costs associated with opening a Bitcoin account and using the electronic currency system. If you carry out your transactions without the help of sales processors, you only pay a fee for them if you want to achieve faster processing. In this case, fees are added voluntarily so that the network confirms the respective transaction faster. The following infographic summarizes the cost advantages of transferring Bitcoins compared to traditional currencies:
The disadvantages of bitcoin
- Not widespread : Even though digital payment methods such as PayPal or Amazon Payments have generally arrived in e-commerce, the Bitcoin system is still a niche market. There is a lack of both merchants and potential buyers who have a Bitcoin account and use the digital currency as a means of payment. In order for the participants to benefit optimally from the possibilities of the network and for a stable bitcoin value to be established in the long term, an increase in clients is required.
- Complicated legal situation : Bitcoin is not illegal in any country, but the decision on the usability of the currency system is up to the jurisdiction of the individual states. For example, the digital coins in Vietnam can only be traded privately, while credit institutions are prohibited from trading. Bitcoin exchanges often have to stop serving certain countries due to judgments that have been passed. The complicated legal situation not only makes working with banks more difficult when it comes to exchanging coins, but also regularly causes sudden price drops.
- No Plan B if you lose your key : The decentralized structure becomes a problem at the latest when you as a user lose the private key of your wallet. This is not stored in the Bitcoin network or blockchain and is therefore not recoverable. As a result, you will no longer be able to access the digital coin collection, which means that all funds will be lost and can no longer be used for transactions.
- Danger of deflation : While the number of possible new bitcoins is constantly falling, demand is increasing and the associated price is increasing. Natural coin attrition, which results from the loss of personal wallet keys and the loss of the coins they contain, contributes to this increase. This attracts investors who buy bitcoins, hold them for the long term and speculate on higher prices.
- Highly fluctuating value : The small number of individuals, shops and companies involved is the main reason for the highly volatile bitcoin price. Even small events, activities or transactions can have a major impact on the price, which has made the network very unpredictable to date. An entry on an entrepreneurial level is therefore associated with a very large risk.
- Ongoing development process: According to the responsible developers, the Bitcoin software is still in the beta phase. New, unfinished functions, tools and services that are intended to make the network even more secure and accessible to a broader mass are therefore not uncommon. Various minor program errors also appear regularly, but thanks to the attentive and committed community, these are quickly rectified.
Offer Bitcoins as a means of payment – this is how it works
In order for the customers of your online shop to be able to pay with bitcoins, you first need a wallet, which you receive by installing the software . After setting up the digital coin collection, you have two options for getting your customers’ coins:
- They use an external merchant service like Bit Pay or Coinbase that acts as a link between you and your customers. In some cases, these service providers also offer to convert bitcoins into other currencies. Provider-specific fees are due for the service provided.
- You transmit the Bitcoin address yourself and check on your own that the customer then transfers the corresponding amount. In contrast to using a dealer service, this requires a high degree of effort and coordination. In return, however, you save the additional costs incurred for external processing of the transactions.
If you decide on the latter option, you should create a separate Bitcoin address for each transaction in order to avoid complications when allocating amounts received later. You then simply add the respective address to the invoices. There is also a separate information page that lists the Bitcoin addresses that belong to the individual invoice numbers. So buyers can just copy and paste them into your client.
It is also one of your tasks to set the Bitcoin price for the goods offered. As a rule, it makes sense to use the current exchange rates as a guide. However, you should include an extra clause in the purchase contract that allows the price to be adjusted in the event of very large exchange rate fluctuations, and clearly define who pays for the transaction fees (usually the buyer). You can verify receipt of a payment either in your wallet or on blockexplorer.com. Since Bitcoin does not have built-in buyer protection, you should also offer to run larger transactions through an escrow service.
Trading with bitcoins – this is what the future looks like
The basic principle of any currency is trust that someone else wants it. It does not matter whether it is paper money, gold bars or digital coins. The decisive question when clarifying the future of bitcoins is logically the question of acceptance.
Two points play a decisive role in the hesitant attitude of many potential Bitcoin users: On the one hand , there is a lack of trust in the security and consistency of the payment network . In the recent past, established exchanges have repeatedly been the victims of cyber attacks , in which coins worth several million euros were stolen – and these attacks are just one of the reasons for the fluctuating course of the digital currency. On the other hand, many are also hesitant due to the low level of distribution, the uncertain legal situation and the fact that the development process is not yet complete .
However, the Bitcoin software itself is considered very secure. Any changes to the underlying protocol can only be implemented with the consent of all users . In addition, the steady increase in available coins should have a calming effect on the price in the long term and prevent extreme fluctuations in the future. Anyone who adds the up-and- coming payment method to their online shop only takes a risk if a large part of the total turnover is made overnight via Bitcoin. Bitcoin does mean additional work for a few smaller transactions, but at the same time it also offers the opportunity to address a new group of customers.
What is the role of payment processors in the Bitcoin ecosystem?
A tender is causing speculation: will Amazon customers soon be able to pay with cryptocurrencies such as Bitcoin and Co.? A closer look shows that Amazon wants to expand its power.
A current tender by the online giant Amazon is making the rumor mill simmer: The largest mail order company is looking for an executive with expertise in the field of digital currencies and blockchain technology.
But what does that mean? Will Amazon soon, like PayPal , allow payments with Bitcoin and Co.? Or does the mail order company even want to bring its own currency onto the market? A look at the tender reveals at least tendencies.
The person we are looking for is to play a leading role in the payment acceptance and experience team and establish a payment strategy for the online giant in the field of digital currencies and blockchain. Cryptocurrencies such as bitcoin or ether work with blockchain technology, while some digital currencies, such as the digital euro, do not use blockchain according to current plans.
The blockchain technology securely protects payment transactions with cryptocurrencies against manipulation, since each block on the blockchain is – to put it simply – encrypted with a complex arithmetic task. If a user subsequently changes a block in the chain, i.e. manipulates a payment, the arithmetic task no longer matches the result. The scam thus becomes obvious and exposed by the other users on the network.
Blockchain professional with deep financial knowledge wanted
The new Amazon executive not only has to know this blockchain technology in detail, but is also said to be an expert in cryptocurrencies and the digital currency plans of central banks such as the ECB. In addition, the person must have in-depth knowledge of distributed ledger technology.
This records the transactions and makes them traceable. Unlike a classic cash book, the distributed ledger is copied several times and stored decentrally by several users of the technology. This also protects against manipulation and increases security. For example, Bitcoin is a cryptocurrency that uses distributed ledger technology for its processes on the blockchain.
A new service from the subsidiary Amazon Web Services (AWS) shows the ambitious goals Amazon is pursuing: The largest online retailer and its subsidiary already offer a blockchain managed by Amazon, which is based on the crypto systems Hyperledger and Ethereum – the second largest cryptocurrency after Bitcoin is.
Amazon wants to bind companies more to itself
Users can create new blockchain applications themselves with just a few clicks, and according to AWS, it has over 70 blockchain applications that users can customize with just a few clicks. What sounds complicated can have enormous significance.
Not only payment processes are possible via such a blockchain, supply chains can also be reproduced transparently and forgery-proof with this technology. Read here what opportunities crypto ecosystems like Ethereum offer and how this could revolutionize many sectors of the economy .
Since the network already exists, it is easier for companies to switch to this technology – since they do not take over the hardware and set up the network themselves, but build on an existing one. With Nestlé, Amazon has already found a major partner for this application who is promoting the technology.
But what does that mean for customers? For payment processing at classic mail order companies, this focus on blockchain technology can mean opening up to new currencies.
Many companies opened up to Bitcoin and Co.
This year, many large US companies have opened up to cryptocurrencies such as Bitcoin, Ether or Litecoin. Paypal, for example, already enables its American customers to pay for purchases with Ether or Bitcoin or to store their cryptocurrencies with the payment service provider.
It is therefore not unlikely that Amazon will soon make more payment options available. The innovative approach of the subsidiary AWS also shows the ambitious goals the US group is pursuing. He also seems to want to use the new technology to attract more companies and thus gain more access to data. Amazon is already the largest cloud provider.
And from its new leader in the payments team, Amazon expects nothing less than a vision for the future payment processes at the online giant.
Does Amazon even want its own currency?
It would therefore also be possible for Amazon to use the blockchain experts it is looking for to create its own cryptocurrency with which customers can pay for all services – both at the online retailer and at its subsidiaries. This would give the company more control over customers’ money as it would be tied up in the Amazon ecosystem.
Amazon would not be the first company to possibly consider its own cryptocurrency. Facebook has been working on its own cryptocurrency for several years – first with Libra and now with Diem.
Pay with Bitcoins in 5 steps
The digital currency unit Bitcoin is on everyone’s lips. Here we explains in five steps how the cyber currency works.
Bitcoin , BTC for short, is a currency unit that users exchange in a so-called peer-to-peer system, i.e. a decentralized computer network. Using them currently carries the risk of total loss, as nobody can predict the stability of the currency. Anyone who still wants to take the risk can buy Bitcoins and use them to pay – and it works like this:
- Open an account
First, the user loads the Bitcoin client from the network and installs it on his computer. Personal information does not have to be given. When first opened, the software downloads the network’s common database – a directory of all payments on the Bitcoin network. Depending on the internet connection, loading can take several hours. The database ensures that nobody can transfer counterfeit money: it assigns each bitcoin to a bitcoin address and thus to a user. The user automatically receives their own bitcoin address, a cryptic letter code, when they install the software. For example, it may look like this: 1Lu3nfXbD3UP76NMAgvTAGdUzWdvvB3zCP. In the program, it is specified above under the item “Your Bitcoin address”. Also, the software saves a file called wallet.dat on the computer. It contains cryptographic keys,
- Buying coins
There are different ways to get bitcoins: a ) Free bitcoins: If you don’t want to venture too far as a new user, you can request free money of 0.002 bitcoin on the Bitcoin Faucet website , which is currently about two bitcoins euro cents. To do this, he must have a Google account and provide his Gmail address. b) Cash exchange: Private individuals offer bitcoins for cash – these bitcoin traders, their place of residence and their telephone numbers or e-mail addresses are listed on the Bitcoin local page . c ) Exchange trading: Internet sites such as Mt Gox or BitMarket offer bitcoin for euros or others currencies.
The most important cryptocurrencies in the world
To do this, the user has to register once and send the amount of money to the exchange via bank transfer or payment systems. Bitcoin purchase orders can then be placed like on a stock exchange, eg ten Bitcoin at a price of 14 dollars. An order that is higher than the current quote price on the exchange will be filled immediately. The exchange finally sends the bitcoins to the user’s bitcoin address. The exchange is also the place to convert bitcoins back into euros. d) Mine bitcoins: Bitcoin users can also calculate new bitcoins themselves. This so-called mining requires powerful computers and is not recommended for computer laypeople.
- Pay with bitcoins
If someone bought bitcoins on the stock exchange, the corresponding amount is listed in their bitcoin client. In order to transfer an amount of money, it is sufficient to enter the amount and the address of the recipient in the software. After about ten minutes, the money has reached the recipient. A list of stores that accept bitcoin.
In order to prevent the loss of the virtual bitcoin wallet, for example due to damage to the hard drive, the wallet.dat file should be copied – for example to a USB stick. Since hackers can gain access to the computer via the Internet and steal the file, it should also be encrypted using a special program. On Windows, the file can be found in the path C:Documents and Settings User name Application DataBitCoin, on Mac under ~/Library/Application Support/Bitcoin/.
- Bitcoin for mobile phones
Anyone who uses the Internet more often can now also download Android apps, such as Bitcoin . They turn the mobile phone into a bitcoin wallet. To pay, the recipient’s software generates an invoice in the form of a QR code, the square cousin of the barcode. As soon as the sender scans this code with the mobile phone camera, the software sends the money to the recipient’s bitcoin address via the Internet. Caution: The programs are still under development and may contain errors. Therefore, they should only be used to transfer small sums of money. So far there are no payment apps for the iPhone, but there are programs such as the Bitcoin App that display current price developments.
How to collect bitcoin payments directly without relying on an intermediary?
Leaflet – Notes on the Payment Services Supervision Act
The Payment Services Implementation Act of 2009 put the prudential Part of the First Payment Services Directive (2007/64/ EC ; hereinafter also: ” PSD 1″ ) into national law on October 31, 2009. With the creation of the law on the supervision of payment services (Payment Services Supervision Act – ZAG ; hereinafter also: ” ZAG 2009″ ) under Art. 1 of this law, the legislature at the time took over the giro business, previously banking business according to1 Para. 1 Sentence 2 No. 9 of the Law on Credit (Banking Act – KWG ), widely and the money transfer business.
as well as the credit card business altogether from the catalog of banking transactions and financial services requiring authorization and subjected these transactions as payment services to the new regulatory regime of the ZAG .
With the law implementing the Second E -Money Directive the provisions of Directive 2009/110/ EC transposed into national law on April 30, 2011. The e -money business, which had previously been banking business in accordance with section 1 ( 1) sentence 2 no. 11 KWG , was removed from the catalog of banking transactions and the operators were transferred to the ZAG as a new category of institution .
The Second Payment Services Directive (hereinafter also: ” PSD 2 “) should further develop the European internal market for cashless payments created by PSD 1. Essential contents of the guideline – and the implementation law – are the expansion of the group of payment services to include payment initiation services and account information services and the reconfiguration of the exceptions. The PSD 2 is governed by the Act Implementing the Second Payment Services Directive transposed into national law. The core of the legislative amendment is Article 1 with the new law on the supervision of payment services (hereinafter also: ” ZAG 2018″ or simply ” ZAG “ ), which, in accordance with Art. 15 para. 4 sentence 1 PSD 2- UmsG 2017 with the in The provisions explained in this leaflet come into force on 13.01.2018; at the same time, the ZAG 2009 expires in accordance with Art. 15 Para. 4 Sentence 2 Payment Services Directive 2-UmsG . This leaflet gives in anticipation
on the future scope of application of the ZAG 2018 Notes on payment services (section 1 ( 1) sentence 2 ZAG ), on the exceptions (section 2 ( 1) ZAG ), on e -money business (section 1 ( 2) sentences 2 bis 4 ZAG ), the activities permitted for institutions (Section 3 ZAG ), the authorization requirement for payment and e -money institutions (Sections 10 ( 1) sentence 1, 11 ( 1) sentence 1 ZAG ) and the registration requirement for account information services only (§ 34 Para. 1 Sentence 1 ZAG) as well as the obligation to notify pursuant to Section 2 ( 2) and (3) ZAG and the publication and information pursuant to Section 2 ( 4) ZAG .
This leaflet is being updated and replaces the previous leaflet – Notes on the law on the supervision of payment services (payment services supervision law – ZAG ) of December 22, 2011 on the entry into force of the ZAG 2018.
- Payment services (Section 1 ( 1) sentence 2 ZAG )
Payment services are the services specified in Section 1 ( 1) sentence 2 ZAG ( positive catalog of payment services ). A payment service regularly takes place in a triangular relationship between payer, payee and payment service provider. The individual facts may apply side by side. The license or registration requirement for payment services does not lapse if they are provided as a secondary activity to another activity; the law does not recognize any general secondary employment privilege.
The official justification of the government explains the history of the origin, systematic connection and factual scope of the individual facts:
“Sentence 2 defines the catalog of payment services in implementation of Article 4 Number 3 of the Second Payment Services Directive in conjunction with Annex I Numbers 1 to 8 of the Directive. Compared to the previous Payment Services Directive, changes were made in the Second Payment Services Directive in that the catalog of payment services was expanded to include two new items – payment initiation services (number 7) and account information services (number 8). In addition, the digitized payment business is no longer an independent fact. It was previously regulated in Section 1 Paragraph 2 Number 5.
The fact that digitized payment transactions no longer exist as an independent payment service does not mean that transactions in this area are no longer recorded as payment services under the new legal situation. According to the requirements of the Second Payment Services Directive, these should still be supervised as payment services under this law. Only the need for a special fact is no longer seen. In material terms, the transactions that have so far been classified as digitized payment transactions are generally classified as acquisition transactions 1 paragraph 1 sentence 2 number 5 or money transfer transaction according to § 1 paragraph 1 sentence 2 number 6. Depending on the structure of the payment service contract, an assignment to another payment service according to the new system of § 1 paragraph 1 sentence 2 will also be considered in individual cases (see Article 109 paragraph 5 of the Second Payment Services Directive).
The classic payment services, which are already regulated by the previous law, namely the deposit business, the withdrawal business, the payment business with the granting of credit, the payment business without the granting of credit, both types of payment business each subdivided into direct debit business, payment card business and transfer business, the issue of payment instruments, the acquisition business (in the second Payment Services Directive called “Acquiring”) and financial transfer business are mentioned under numbers 1 to 6. They have been adopted largely unchanged and now correspond to the structure of the directive.
As before, the purpose of the provision is to also cover services based on private law by a third party who is not involved in a given underlying transaction, which help the payer or are intended to enable him to transfer cash, electronic or book money from him to the payee. The fact that they are provided together with other services does not invalidate their qualification as a payment service. Sentence 2 of Recital 6 of the First Payment Services Directive was deleted with the new version of the directive. Whether a payment service is relevant must therefore be distinguished from the question of whether a license under this Act is required to provide the payment services.
The legal form of the relationship between payer and payee (so-called value date ratio) is irrelevant ( BT – Drucks . 16/11613, p.32). Rather, what is decisive is the content of the business activity, which, insofar as it consists of payment processing, is generally subject to authorization under the Payment Services Directive and this law. The classification as a payment service cannot be avoided if the service provider has the claim that is to be paid, for example the purchase price of a product, assigned by the payee on the basis of a claim purchase agreement. When the previous law was enacted in 2009, the legislature had already recognized that payment services are often associated with an assignment of claims, and therefore, according to Section 32 (6) of the Banking Act, institutes under the Payment Services Supervision Act that require authorization factoring provide, exempted from dual supervision as a financial services institution. Even if the payer makes a payment to the service provider with a debt-discharging effect, the original claim holder remains the payee when the event is viewed from an economic point of view, insofar as the purpose of the service is to process a payment. Even in the case of a financial service in the form of factoring between the factor and connecting customers, payment processing and not financing is often sought from an economic point of view . If the service provider wants to avoid the qualification of his service as a payment service in an economic setting that looks like a payment triangle, he must enter into the purchase contract as a seller with all obligations from the beginning and without ifs or buts.
The collection of unpaid (non-performing) claims does not fall under the services that should be regulated as payment services according to the ideas of the European legislator. In essence, it is something completely different from the typical payment service that the Second Payment Services Directive, like the First Payment Services Directive before it, had in mind.
The new payment services, which the previous law did not know, are the payment initiation service (number 7) and the account information service (number 8). In contrast to the other payment services, they are characterized by the fact that the service providers never come into possession of customer funds”.
- a) Deposit or withdrawal transaction (§ 1 Para. 1 Sentence 2 No. 1 or 2 ZAG )
payment services 1 para. 2 no. 1 or 2 ZAG are the services with which cash deposits into a payment account or cash withdrawals from a payment account are made possible, as well as all processes required for managing a payment account (deposit or withdrawal transaction).
After the RegLimit. ZAG 2017 the new provisions adopt the content of the previous § 1 Para. 2 No. 1 in its two alternatives without any changes. They set Art. 4 No. 3 1 and 2 PSD 2 um . Section 1 ( 1) sentence 2 nos. 1 and 2 ZAG separate the facts of nos. 1 and 2 of Annex I of the First Payment Services Directive, which were previously summarized in section 1 ( 2) no . The closer alignment with the wording and system of the PSD 2 will facilitate communication between BaFin and the competent supervisory authorities of other Member States when issuing the European passport for incoming and outgoing institutions . In this leaflet, the facts are nevertheless explained together.
The deposit or withdrawal transaction Section 1 ( 1) sentence 2 no. 1 or 2 ZAG is materially at the interface between cash and book money . Any service that helps the user to turn cash into book money or book money into cash is recorded.
- aa) Payment account (Section 1 ( 17 ) ZAG )
The central concept is the payment account Section 1 ( 17 ) ZAG . Accordingly, a payment account is an account in the name of one or more payment service users that is used to execute payment transactions. The ZAG 2018 materially takes over the regulation from the ZAG 2009; the RegBegr. ZAG 2017
“The provision corresponds to the previous § 1 paragraph 3 and adopts the wording of Article 4 number 12 of the Second Payment Services Directive”.
It is therefore an account that shows the claims and liabilities between the payment service user and the payment service provider within the business relationship in terms of books and accounts and determines the payment service user’s respective claim against the payment service provider.
So even if the legislature of 2017 dealt with the payment account again, the explanations that provided the official justification for the government draft of the Payment Services Supervision Act of 2009 (hereinafter also: RegBegr. ZAG 2009 ) for the payment account, useful for the user of the law; because the legislature of 2017 relied on them:
“In the future, payment accounts with a very limited application profile in accordance with 13 of this law compared to the current accounts of the banks will be able to be managed at the payment institutions themselves. Whether such accounts are maintained is initially based on a business policy decision as to which of the payment activities listed in the Annex to the Payment Services Directive should be permitted to be offered and whether the maintenance of such payment accounts is technically necessary for the processing of the payment services. The law does not oblige the payment institution to maintain such accounts for payment service users; it merely enables him to keep such accounts. […]
Paragraph 3 serves to implement Article 4 No.14 of the Payment Services Directive. A payment account within the meaning of this provision is any current invoice between the payment service provider and the payment service user for the execution of payment transactions. […] The payment institution can therefore only offer basic services in the context of processing payment transactions via the payment account, because the Payment Services Directive intentionally severely restricts the payment institution in account management. The payment account is therefore not comparable to the current current account, especially when it functions as a “salary account”.
A payment account within the meaning of this provision is not just an internal, technical account of the payment service provider; Rather, it also documents an obligation (of the account-managing payment service provider) to owe money to another (the account holder) (to the extent that this is recognized as an abstract claim from the account) in order to pay it to himself or to a third party in accordance with the instructions of the account holder – if necessary with the involvement of another payment service provider.
A payment account is usually an account that meets the tax account definition of Section 154 ( 2) of the Fiscal Code. […]”
The term “ payment account” corresponds to that of the ZAG2009 . It adopts the wording of Art. 4 No. 12 PSD 2. A payment account is an account in the name of a payment service user that is used to execute payment transactions 675f paragraph 4 BGB serves. It represents the claims and liabilities between the payment service user and the payment service provider within the business relationship in terms of bookkeeping and invoices and determines the payment service user’s respective claim against the payment service provider. The giro accounts and credit card accounts held with banks generally come under the term payment account. That too Seizure protection account according to § 850k ZPO is a payment account. Savings accounts , including online savings accounts , which can be used with a corresponding reference account, are not payment accounts ZAG . The mere provision of money for safekeeping does not establish a payment account , even if the money can be accessed in partial amounts. The current account only then becomes a payment account ZAG if it is (also) intended for the execution of payment transactions. Also other pure deposit accounts, such as the accounts for call money and time deposits as well as the pure credit and credit card billing accounts, mere deposits and purely internal, technical clearing, interim and profit accounts are also not payment accounts ZAG 2018; all of them, without prejudice to their inherent value, are not intended for the execution of payment transactions. The shadow accounts kept with an e -money issuer , which reflect the circulating e -money of this issuer, do not meet the requirements of the payment account either. Even the possibility of allocating the cash flow of a prepaid card issued with a number or a code is not sufficient.
Under Section 1 Paragraph 1 Sentence 2 No. 1 or 2 ZAG , a payment service is always associated with a payment account. However, this is not necessarily a payment account that is managed by the institution that may qualify as a payment institution; the payment account can also be maintained with another payment institute or other payment service provider. This is how every other multilateral clearing group is based outside the established banking sector on payment accounts held with the central clearing house. Consequently, a company that allows its employees to offset among themselves between the internal accounts with which it depicts the salary entitlements of the individual employees also keeps payment accounts ZAG .
In principle, every barter system and every exchange ring is such a clearing circle; the participants keep payment accounts, which may only be due to the fact that the selected accounting unit is not legal tender and the system does not provide for a conversion of its accounting units into legal tender, no payment accounts.
Any provision of a sum of money for payment purposes in a triangular relationship that goes beyond a mere financial transfer justifies a sufficient current account in the context of checking the existence of a payment account.
1 para. 17 ZAG , even without the possibility of partial calls being agreed or partial calls actually being practiced.
Execution of payment transactions
The payment transaction is defined in 675f Para. 4 Clause 1 BGB as any provision, transmission or withdrawal of a sum of money, regardless of the underlying legal relationship between payer and payee. According to this, three types of payment account-supported payment transactions can be considered:
– the deposit of cash against the creation of book money ( 1 Para. 1 Sentence 2 No. 1 1st Alt. ZAG )
– the payment of cash against the release of book money ( 1 Paragraph 1 sentence 2 no. 2 2nd alternative ZAG )
– the transfer of book money (§ 1 Para. 1 Sentence 2 No. 3 ZAG ).
Accounting and accounting presentation
The payment transactions and the procurement of money on the part of the payment service user must be documented in a comprehensible manner for the payment service user or an expert third party. The promise to remember everything faithfully is not sufficient to document the promise, even if it is broken, but to establish a legal relationship that qualifies the ZAG as a payment account.
Legally binding claim
Accounts that are declared to be only used for accounting purposes without being intended to represent claims or liabilities to another party are classified as payment accounts ZAG off.
- bb) Variants of deposit or withdrawal transactions (1 Para. 1 Sentence 2 No. 1 or 2 ZAG )
The deposit or withdrawal transaction is regulated in Section 1 ( 1) sentence 2 no. 1 or 2 ZAG in three variants:
– Cash payments into a payment account (Section 1 ( 1) sentence 2 no. 1 alternative 1 ZAG )
– Cash payments from a payment account (§ 1 Para. 1 Sentence 2 No. 2 Alt. 1 ZAG )
– Transactions required for managing a payment account (§ 1 Para. 1 Sentence 2 No. 1 Alt. 2 and No. 2 Alt. 2 ZAG )
Cash deposits into a payment account (§ 1 Para. 1 Sentence 2 No. 1 Alt. 1 ZAG )
The service, which is intended to enable cash deposits into a payment account, requires that the payment account be used as a current account with one bank or as a simple payment account with another Payment service provider is managed. Any assistance that the institution with which a payment account is held grants the account holder a sum of money to credit this or another payment account is not a payment service 1 paragraph 1 sentence 2 no. 1 alternative 1, but Old.2.
A supermarket that, instead of giving change to the customer at the cash register, transfers it to the bank details specified by the customer at his behest, provides a payment service Section 1 ( 1) sentence 2 no. 1 alternative 1 ZAG .
The more technologically advanced version of such a service is accepting a cash deposit into a payment account through an independent operator’s ATM, where the user can deposit funds in favor of his account held at a credit institution. The operator of the ATM falls under Section 1 Paragraph 1 Sentence 2 No.1 Alt. 1 ZAG .
Cash payments from a payment account (§ 1 Para. 1 Sentence 2 No. 2 Alt. 1 ZAG )
he cash payment is a mirror image of the cash payment. It includes every action in the context of a cash withdrawal that would fall under Section 1 ( 1) sentence 2 no. 1 in the context of a cash deposit. The payout transaction also requires that the payment account is held with a third party, be it as a checking account with a licensed bank or as a simple payment account with another payment service provider. Credit cards and debit cards regularly have a cash payment function, e.g. B.the giro card.
The independent operation of cash dispensers is a payment business i. s.d. Section 1 ( 1) sentence 2 no. 2 ZAG . With the help of the ATM, the customer can convert any bank balance or a corresponding disposition limit into cash.
Processes required for keeping a payment account (section 1 ( 1) sentence 2 no. 1 alternative 2 or no. 2 alternative 2 ZAG )
The company that keeps a payment account for a customer falls under section as soon as the payment account is set up 1 paragraph 1 sentence 2 nos. 1 and 2; the second variant of the offense is relevant in each case.
- b) Payment transaction (§ 1 Para. 1 Sentence 2 No. 3 ZAG )
Payment transaction (Section 1 ( 1) sentence 2 no. 3 ZAG ) is the execution of payment transactions including the transfer of funds to a payment account with the payment service user’s payment service provider or with another
payment service provider through
- a) the execution of direct debits, including one-off direct debits (direct debit transaction)
b ) the execution of payment transactions using a payment card or a similar payment instrument (payment card transaction)
- c) the execution of transfers, including standing orders (transfer transaction)
, in each case without granting credit.
The regulation system explains the RegBegr. ZAG2017:
“The provision adopts the content of the previous 1 paragraph 2 number 3 unchanged, but aligns the ranking of the individual payment transactions with the ranking according to Article 4 number 3 in conjunction with Annex I number 3 of the Second Payment Services Directive, which it serves to implement.
In practice, at least in Germany, money transfers by direct debit or bank transfer have so far largely been carried out by CRR credit institutions and e -money institutions, since the facts are generally
assumed to be related to the management of the relevant sight accounts. Nevertheless, multilateral clearing groups outside of the established banking sector are also conceivable, which would qualify as payment transactions according to number 3 or number 4.
A service provider who only transmits data records based on the internet banking of an approved bank does not operate a payment transaction. This applies both when the customer is directed to his internet banking account via the operator’s website and makes a transfer from there, and when the customer generates a transfer via the service provider’s website. The aim of this procedure is to give the merchant certainty that the transfer order is actually issued and executed. Depending on how it is designed, this type of service is classified as a payment initiation service according to number 7.
Re letter a (direct debit transaction)
Section 1 paragraph 1 sentence 2 number 3 letter a determines the execution of direct debits, including one-off direct debits, as a subcategory of payment transactions. The regulation corresponds to the previous § 1 paragraph 2 number 2 letter a. It implements Article 4(3) in conjunction with Annex I(3)(a) of the Second Payment Services Directive.
Re letter b (payment card business)
The provision corresponds to the previous Section 1 paragraph 2 number 2 letter c. It implements Article 4(3) in conjunction with Annex I(3)(b) of the Second Payment Services Directive.
Re letter c (transfer transaction)
The regulation corresponds to the previous § 1 paragraph 2 number 2 letter b. It implements Article 4(3) in conjunction with Annex I(3)(c) of the Second Payment Services Directive”.
According to § 1 para. 15 ZAG , the payer is a natural or legal person who is the holder of a payment account and allows the execution of a payment order from this payment account or, if there is no payment account, a natural or legal person who issues the payment order. According to the meaning and purpose of the provision, the payer can also be a majority of persons, such as a partnership under civil law or a community of heirs, as well as a previous company or an association without legal capacity.
thereg limit ZAG 2017 explains the definition of the payer:
“The definition will be newly included in the law. The provision implements Article 4(8) of the Second Payment Services Directive”.
According to Section 1 ( 16 ) ZAG , the payee is the natural or legal person who is to receive the amount of money that is the subject of a payment transaction as the recipient. According to the meaning and purpose of the provision, the payee can also be a majority of persons, such as a civil law partnership or a community of heirs, as well as a pre-company or an association without legal capacity.
The RegLimit. ZAG 2017 explains the EU legal background:
“The definition will be newly included in the law. The provision implements Article 4(9) of the Second Payment Services Directive”.
According to § 1 Para. 21 ZAG , the direct debit is a payment transaction to debit the payer’s payment account, in which the payment transaction is initiated by the payee based on the payer’s consent to the payee, his payment service provider or his own payment service provider.
The RegLimit. ZAG 2017 states:
“The provision implements Article 4(23) of the Second Payment Services Directive. It corresponds to Article 2 Number 2 of Regulation ( EU ) 260/2012 of the European Parliament and of the Council of March 14, 2012 laying down the technical regulations and business requirements for credit transfers and direct debits in euros and amending Regulation ( EC ) No. 24/ 2009, referred to in recital 76 of the Second Payment Services Directive. This does not entail a change in the existing legal situation”.
According to § 1 paragraph 22 ZAGthe transfer is a payment transaction initiated at the instigation of the payer to credit the payee’s payment account from the payer’s payment account in execution of one or more payment transactions by the payment service provider who manages the payer’s payment account.
The RegLimit. ZAG 2017 explains:
“The definition will be newly included in the law. The provision implements Article 4(24) of the Second Payment Services Directive. It corresponds to Article 2 Number 1 of Regulation ( EU ) 260/2012. In contrast to the direct debit (pull transaction), the transfer is a push payment. The payer takes on both the initiative and the triggering of the payment transaction, possibly also with the help of a payment initiation service when initiating the payment transaction via internet banking , with the aim of transferring a specific payment amount to the payee’s payment account without using cash.”
Already the RegBegr. ZAG 2009 led to the payment transaction according to § 1Paragraph 2 No. 2 ZAG old version from:
“According to § 1 Para. 2 No. 2, a payment service is the execution of any provision, transfer or withdrawal of a sum of money triggered by the payer ( so -called push transaction) or payee ( so -called pull transaction), regardless of the legal structure of the existing value date relationship between payer and payee . […].
Finally, letter c records the execution of payment transactions that are initiated using a payment card or a similar instrument. In practice, several types of cards have developed, which differ in the point in time at which the payer is debited. If payment is made with a credit card, the payer’s account, which he has with a bank, will only be debited at the end of the period agreed with the card-issuing office (” charge cards “, also ” delayed debit cards ” due to the delay in debiting the payer’s account“) or, in the case of credit cards in the narrower sense, drawn against a revolving credit line with the card issuer. If, on the other hand, you pay with a debit card, the payer’s account at his bank is debited immediately after the transaction ( e.g. ” girocard “/” electronic cash “). […]”
The above statements are also of fundamental importance under the regime of the ZAG 2018. Section 1 ( 1) sentence 2 no. 3 ZAG covers the entire transfer of book money whether by direct debit, payment card or bank transfer. As an operator, however, it only records those bodies that are directly involved in the transfer in the narrower sense (book money “flows” through transfers in multilateral clearing systems) through the necessary account movements in their function as paying or (first or possibly further) collection agency are (“through which the money flows”).
Other service providers who only initiate this transfer of book money should not be covered by this fact; if necessary , you can use a payment service according to § 1 paragraph 1 sentence 2 no. 7 ZAGprovide (payment initiation services).
Who, as the operator of the payment transaction 1 Para. 1 Sentence 2 No. 3 ZAG is to be qualified, the person executing the payment transaction must himself ( cf. § 675f Para. 4 BGB) be; he must not merely nudge him. Support for the transmission of the payment order or the submission of the direct debit to the collection agency or the intermediary of the other service provider’s own bank account without operating a multilateral clearing system are not sufficient as such to fulfill the facts of the case. Rather, the operator must be involved in the payment process in a function that cannot be ignored without the payment process not being able to be completed.
As a payment card 1 paragraph 1 sentence 2 no. 3 letter b ZAGmeans any instrument that documents a legal relationship on the basis of which non-cash payments can be made in business transactions ( e.g. credit cards, debit cards or comparable instruments). All payment transactions that are not effected with a card or card-specific data, i.e. payments by bank transfer, check or electronic money, are not covered by § 1 Para. 1 Sentence 2 No. 3 Letter b ZAG .
The payment card business 1 para. 1 sentence 2 no. 3 letter b ZAG 2018 is – as already § 1 para.2 No. 2 Letter c ZAG 2009 – consequently based on a broader understanding than before the facts of the credit card business under
Section 1 Paragraph 1a Sentence 2 No. 8 KWG old version , which in the course of the 4th Financial Market Promotion Act 2002 for reasons of money laundering prevention from the catalog of financial company offenses in section 1 ( 3) sentence 1 no. 4 KWG old version and subordinated to financial services in section 1 ( 1a) sentence 2 KWG as number 8. From then on, it could only be operated by financial service companies and , insofar as it was card-based, was basically only tailored to the issuing and administration of credit cards . The follow-up business in connection with the use of the credit card in question – i.e. the payment initiated with the use of the card – was, depending on the structure , basically institutions with permission for the depositor giro transactions under the KWG . The issuance of credit cards, as well as the issuance of other instruments, is now subject to the acquisition business in the first variant of Section 1 ( 1) sentence 2 no. 5 ZAG 2018, any follow-up business that the issuing body also offers, in addition either to the payment business in the second variant of the offense ( letter – the payment card business) – in the case of the existence of payment accounts with the provider itself – or the acquisition business in the second variant of the facts – if the acceptance and settlement of the payment transactions that are triggered with the payment instrument does not take place via a payment account with the provider ( e.g. via a mere internal credit card clearing account).
- c) Payment transaction with the granting of a loan (§ 1 Para. 1 Sentence 2 No. 4 ZAG )
payment services 1 para. 1 sentence 2 no. 4 ZAG are the execution of the payment transactions mentioned in number 3 with the granting of credit 3 para. 4 (payment transaction with granting of credit).
The RegLimit. ZAG 2017 leads to the payment transaction with the granting of a loan Section 1 ( 1) sentence 2 no. 4 ZAG from:
“The content of the provision corresponds to the previous § 1 paragraph 2 number 3. It implements Article 4 number 3 in conjunction with Annex I number 4 of the Second Payment Services Directive.
Number 4 reflects the corresponding facts from number 3, with the sole difference that the payments are not covered by a corresponding credit balance with the payment service provider, but are credited by him. A payment service provider that grants the loan during the transfer requires permission in accordance with number 4 in addition to permission in accordance with number 3; in doing so, he must also observe the limits set in § 3 paragraph 4 with a permit according to number 4”.
The concept of credit that the PSD2 specifies is broader than the civil law concept of the loan 488 BGB . It not only covers every form of credit that is regulated as a banking transaction under Section 1 ( 1) sentence 2 of the KWG (lending business, discount business, revolving business and guarantee business). It also includes other loans 19 KWG , e.g. also the acquisition of loan claims that are not covered by the concept of granting a loan or another banking transaction. In general, every credit risk or counterparty default risk that the service provider assumes in the course of a payment transaction service is recorded.
- d) Acquisition business (§ 1 Para. 1 Sentence 2 No. 5 ZAG )
payment services Section 1 ( 1) sentence 2 no. 5 ZAG is the issue of payment instruments or the acceptance and settlement of payment transactions ( acquisition business ).
Section 1 ( 1) sentence 2 no. 5 ZAG standardizes two variants of the facts, which Section 1 ( 35 ) ZAG describes in more detail:
– the issuance of payment instruments,
– the acceptance and settlement of payment transactions.
The RegLimit. ZAG 2017 provides the following explanations:
“The provision replaces the previous § 1 paragraph 2 number 4 and implements Article 4 number 3 in conjunction with Annex I number 5 of the Second Payment Services Directive in both alternatives. It extends the scope of the previous payment service according to § 1 paragraph 2 number 4 to the issue of payment instruments and the acceptance and billing (“acquiring”) of payment transactions (acquisition business). The offense now also includes the acceptance of payments for merchants that are not triggered by means of a payment instrument but, for example, by direct debit or bank transfer.
The first alternative regulates the issuance of payment instruments (previously payment authentication instruments) following the previous Section 1 paragraph 2 number 4.
The acceptance and billing (“ acquiring ”) of payment transactions (acquisition business) is the second fact, which is regulated in number 5 following the previous § 1 paragraph 2 number 4. This type of payment service is described in Section 1 Paragraph 33 (now Paragraph 35) Sentence 1 ( cf. there the reasoning as well as the 10th recital of the Second Payment Services Directive). It is this type of service that makes it possible, for example, to pay with a payment card at the supermarket or department store checkout as well as on the Internet, in that the acquirer collects the payment amount for the retailer from the card issuer.
The acquisition business is the more specific fact compared to the payment business and the money transfer business. That too “Sub-acquiring or aggregating may fall under this category. Otherwise it can also fall under the catch-all element of the money transfer business”.
According to Section 1 ( 35 ) ZAG , the acceptance and settlement of payment transactions ( acquisition business ) describes a payment service that causes the transfer of funds to the payee and in which the payment service provider concludes a contractual agreement with the payee on the acceptance and processing of payment transactions. The issuance of payment instruments includes all services in which a payment service provider concludes a contractual agreement with the payer in order to provide a payer with a payment instrument for initiating and processing the payer’s payment transactions.
The RegLimit. ZAG 2017 explains to § 1 Abs. 35 ZAG :
“…The First Payment Services Directive had defined the acquisition business (“ acquiring ”) as a payment service, but assumed that the business operated with it was known.
Sentence 1 describes the acquisition business. A major innovation is the extension of the term, which previously only referred to payment instruments, to include payment transactions. The purpose of the new definition is in particular to introduce a neutral definition of the acceptance and settlement of payment transactions in order to cover not only conventional but also other business models ( cf. 10th recital of the Second Payment Services Directive).
Acquisition business is the activity of companies that includes the conclusion of contracts with the companies or merchants that accept the card as a means of payment, even if more than one acquiring institute or acquirer is involved. These so -called acquiring institutes or acquirers are important insofar as the market penetration and importance of the card in question and thus also customer acceptance and economic success depend to a large extent on the number of merchants who accept the card. Qualification as an acquirer is independent of whether the acquirer carries out the actual data processing itself or, which is more often the case, outsources it to a so -called acquiring processor .
As with sentence 1, the new definition of “issue of payment instruments” included in sentence 2 is a clarification of a term that has been in use since the national implementation of the First Payment Services Directive at the latest. The “issue of payment instruments” is usually also referred to as “issuing”. What is meant here is the process in which the card issuer concludes a contract with the new customer regarding the use of the card issued by him in order to provide him with a payment instrument for initiating and processing the payment transactions initiated with it. As with the acquirer , the classification of the issuer is independent of whether the issuercarries out the actual data processing itself or, which is more often the case, outsources it to a so -called issuing processor “.
- aa) Payment instrument (§ 1 Para. 20 ZAG )
Pursuant to Section 1 ( 20 ) ZAG , a payment instrument is any personalized instrument or method whose use has been agreed between the payment service user and the payment service provider and which is used to issue a payment order will. This not only includes the conventional magnetic stripe or chip cards, but also future-oriented technologies such as from the field of near-field and telecommunications. Methods could be possible in the near future in which the payment service user does not need to have any technical device, in particular no chip card or mobile phone, to initiate a payment transaction. These methods, if they are based on face or voice recognition, fingerprints or unmistakable behavior patterns of the payment service user, are also used as a payment instrument 1 para. 20 ZAG must be qualified.
The RegLimit. ZAG2017 gives the user the following guidance:
“The provision implements Article 4(14) of the Second Payment Services Directive.
The adaptation of the term to the wording of the directive is indicated for two reasons: On the one hand, the term in the draft law should correspond to that of the directive in order not to cast doubt on the directive-compliant implementation of the fully harmonized legal act. On the other hand, the term needs to be adjusted due to the “strong customer authentication” newly introduced with the Second Payment Services Directive. This did not exist in the First Payment Services Directive. While the medium used by the payment service user when issuing a payment order to his payment service provider was previously used as an authentication tool and was accordingly referred to in the previous law as a “payment authentication tool”, the authentication process is decoupled from the medium by the “strong customer authentication” introduced with the Second Payment Services Directive. The authentication is now carried out independently of the medium used when the payment order is issued and also consists of different, partly dynamic elements. Since the authentication elements are combined in tiered form and from different categories, the requirements depending on the type of payment modalities chosen (e.g. B. online access, electronic payment process, etc. ) and no longer from the medium used, the reference to the previous use as “authentication instrument” is removed from the previously used term “payment authentication instrument”, so that the “payment instrument” now remains.
The conceptual development thus takes technical progress into account: the linguistic separation of means of payment as an intermediary medium for issuing payment transactions between payment service users and payment service providers on the one hand and authentication on the other hand creates space for a technology-neutral definition: A technology-neutral payment instrument can be easily used with future technical developments such as For example, in the area of authentication, a biometric recognition process (fingerprint system) can be combined.
Furthermore, the payment authentication instrument was to be seen in the context of the payment authentication business, which is regulated as a separate payment service in the previous Section 1 Paragraph 2 Number 4. The payment authentication business was not taken over as such by the Second Payment Services Directive; it is to be replaced by the acquisition business as a new payment service offense in Section 1 Paragraph 1 Number 5 Alternative 2. This means that an essential basis for the further use of the terminology on the basis of the new course set by the European legislator has been lost.
At the present time, the definition of the payment instrument includes in particular personalized instruments or procedures such as telephone banking with a password, online banking with SMSTAN or TAN generator, the use of cards with a PIN or signature, as well as methods of contactless (near field recognition) or payment based on a machine-readable code , provided that a payment order is issued in this way. Procedures in which a card is used to read the data, in particular to generate a direct debit (ELV procedure) are not covered.
Each personalized instrument or process is characterized by the agreed possibility of using it to issue a payment order within the meaning of Section 675f ( 4) sentence 2 of the German Civil Code .
Other examples of payment instruments are theDebit card using the PIN (not using the signature, because the payer has not issued a payment order to his payment service provider), credit card using the signature or PIN (a payment order is issued in both cases), online banking using PIN or TAN and telephone banking using a password.
- bb) Alternatives to the acquisition business (Section 1 ( 1) sentence 2 no. 5 ZAG )
1st alternative: issue of payment instruments, so -called issuing
The variant of the offense of issuing payment instruments, which is described in more detail in Section 1 ( 35) sentence 2 ZAG , is broken down into two elements: the payment instrument as the object of operation and the issue as an activity of operation.
Issuance means there is a central body that issues a personalized instrument or procedure by agreeing its use as a payment instrument within the meaning of Section 1 ( 20 ) ZAG with the payer ; this central office may also be the operator of the payment instrument issue.
The legal form of the central office is irrelevant; Operators can therefore be natural persons, partnerships or other groups of persons (such as a civil law partnership or a community of heirs), legal persons or corporate structures without legal capacity.
The entities that sell payment instruments on behalf of the payment institution are not included in the operator definition; they may be classified as agents under Section 1 ( 9 ) ZAG . In the event of unauthorized operation of the payment instrument issue, they are also included companies pursuant to Section 7 ( 1) sentence 4 ZAG .
2nd alternative: the acceptance and billing of
payment transactions , so – called acquiring the use of payment cards, but also extends the scope to other business models including those involving more than one entity providing the service of accepting and clearing payment transactions. This is to ensure (according to recital 10 of the directive) that the payee ( e.gMerchants) with whom corresponding contracts for the processing of card payments and other payment transactions are concluded enjoy the same protection regardless of the payment instrument used, provided that the service relating to the processing of other payment transactions corresponds to the activity of accepting and settling card transactions.
It follows from this that the payee, e.g. the retailer, who merely sets up a card reader at the cash register in order to be able to accept the debit card as a means of payment for the purchase of goods and services from customers , is generally not covered by the variant of the offense of the acquisition business.
The service provider who, on the basis of his own contractual relationships (referred to as “acceptance contracts” in the area of credit cards) with companies and retailers, provides services in connection with the processing of debit card or credit card payments or other payment transactions and, in doing so, in particular comes into possession of customer funds with his activity the variant of the facts of the acquisition business. This also applies to service providers whose technical infrastructure is used by other service providers, for example technical network operators.
The description in 1 para. 35 sentence 1 ZAGis primarily based on the transfer of sums of money to the payee and a contractual agreement with the payee on the acceptance and settlement of payment transactions of any kind, i.e. in addition to card payment transactions, in particular transfers and direct debits as well as other types of transactions. Under the extended facts of the acquisition business in the 2nd alternative Service providers who, for example, accept payments from online retailers, whether by bank transfer, direct debit, card payment, e -money or alternative payment methods including services for accepting cash payments, now also fall under this category allow if they get possession of the funds. The service (according to Recital 10 of the Directive) in relation to the processing of other payment transactions must correspond to the activity of accepting and billing card transactions. Conceptually, these companies still fall under the catch-all element of the money transfer business; however, if in a specific individual case one and the same service fulfills both the facts of the acquisition business and the facts of the financial transfer business, the financial transfer business takes a back seat to the more specific facts.
- e) Money transfer business ( 1 Para. 1 Sentence 2 No. 6 ZAG )
payment services i. s.d. § 1 para. 1 sentence 2 no. 6 ZAG are the services where, without setting up a payment account in the name of the payer or the payee, a sum of money from the payer is only used to transfer a corresponding amount to a payee or to another person in the name of the payment service provider acting on the part of the payee or where the amount of money is received on behalf of the payee and made available to him (financial transfer transaction).
Before the ZAG of 2009, when the money transfer business was still classified as a financial service in the KWG in § 1 para. 1a sentence 2 no.6 old version , support for money laundering prevention was the reason why this service was included as a financial service in the KWG and made subject to authorization. However, with the new regulation as a payment service by the Payment Services Implementation Act of 2009, the financial transfer business has gained further importance in the context of the creation of a European internal market for cashless payments. A restriction of the facts from the point of view of the (absent) risk of money laundering, as was still regularly carried out in the administrative practice on the facts of the financial transfer business in Section 1 ( 1a) sentence 2 no. 6 KWG old version, is no longer permissible due to the full harmonization of payment services law required by Community law. In addition to the classic business of money remittance agencies , which are particularly vulnerable to money laundering, also various activities in the field of book money transfers, where a concrete risk of money laundering is not immediately apparent.
The RegLimit. 2017 provides an interpretation aid for the financial transfer business:
“The content of the provision corresponds to the previous § 1 paragraph 2 number 6. It implements Article 4 number 3 in conjunction with Annex I number 6 of the Second Payment Services Directive. Instead of reproducing the facts of the directive in Annex I, the implementation law repeats the definition of the directive, now from Article 4 number 22 of the Second Payment Services Directive.
A money transfer is a simple payment service that originally catered to cash transfers and has expanded over time. It captures the situation in which the payer gives cash to a payment service provider, who transfers the corresponding amount (more precisely, the information that someone else, in conjunction with the payment service provider at the destination, causes the target person or their payment service provider to hand over a corresponding amount of money) over the telephone or forwards another telecommunications network to the target person or their payment service provider. In some Member States, supermarkets, wholesalers and retailers offer such a service to their customers for paying utility bills and other regular household bills. Such payment services should be treated as a transfer of funds unless this activity is covered by another payment service (see Article 4(22) and recital 9 of the Second Payment Services Directive). A financial transfer service provider can act on the side of the payer (1st alternative), the payee (2nd alternative) and on both sides. The payer and payee can also be the same (see Article 4(10) of the Second Payment Services Directive). It is not relevant for the facts of the case whether other purposes are pursued by those involved in the payment processing beyond the mere transmission of the amount of money. Additional services therefore do not exclude the facts either. It would not be justified to leave the scope of protection of the law if a company offers other services beyond payment processing. For example, receivables management is offered as an additional service. The possibilities of offering services via the Internet have led to a significant increase in payment services with additional services.
Financial transfers are payment services that are not executed via a payment account. However, the deposit of cash is not a prerequisite. How the payment service user ultimately contributes the amount of money, be it in cash or by bank transfer, cheque, electronic cash , direct debit authorization and the like, or whether offsetting takes place, is ultimately irrelevant. Finally, number 6 should cover every payment transaction in which no account relationship is established between the payment service provider and the payment service user.
Cash transfer transactions will not include cash on delivery payments in mail-order sales, where the company delivering the package collects the invoice for the goods from the customer for the account of the supplier step by step against the handing over of the package containing the goods.
The official justification for the ZAG teleologically reduces the facts of the money transfer business to the implementation of cash on delivery payments . As under the regulatory regime of the ZAG 2009 in the light of PSD 1, these remain possible without a permit. The collection of unpaid (non-performing) receivables should continue to not fall under the financial transfer business facts; this corresponds to the previous administrative practice of the Federal Agency.
The RegLimit. . ZAG 2017 explains:
“… The collection of unpaid (non-performing) claims does not fall under the services that, according to the ideas of the European legislator, should be regulated as payment services. In essence, it is something completely different from the typical payment service that the Second Payment Services Directive had in mind, just like the First Payment Services Directive before it.”
The money transfer business acts as a catch -all event for services that consist of the orderly transfer of funds and which do not fall under the circumstances of Section 1 ( 2) sentence 2 nos. 1 to 5 ZAG . This also explains the word ” only ” in the legal fact – as a catch-all fact for the payment account-related payment services, which are regulated under the previous numbers, in the sense of one without setting up a payment account. The definition of financial transfers in Article 4 ( 22) of the PSD2, the factual element “exclusively for transmission” in § 1 para. 1 sentence 2 no. 6 ZAG 2009 has been changed by ZAG 2017 to “only for transmission”. This regulation – just as little as its predecessor regulation from the ZAG 2009 – should not be misunderstood to the effect that the facts of the financial transfer business would not be fulfilled if other ( e.g. contractual) goals are pursued in addition to the pure transfer of the amount of money.
It is characteristic of the money transfer business that the payment service provider – unlike the payment services regulated under numbers 1 to 4, which are connected to aalso only link a payment account held with another payment service provider – does not hold a payment account within the meaning of Section 1 ( 17 ) ZAG 2018 for the customer and, by definition, does not link its service to a payment account that the customer holds with another payment service provider. It was not the intention of the legislature of 2009 and also not the intention of the legislator of 2017 or the legislator to rule out the fact that the 1st alternative of the money transfer business constitutes the fact that other purposes are pursued with the service, while the 2nd alternative as well as the this restriction does not provide for other payment service circumstances. Rather, for the payment services framework agreement according to § 675fPara. 2 sentence 2 BGB expressly stipulates that it can be combined with another contract. The isolated wording of the law may also be ambiguous in this respect, as long as one ignores the meaning and purpose of the legal regulation; in terms of the system of laws, the picture that emerges for the users of the law is clear .
In this sense, the RegBegr. ZAG 2009 clear:”Finally, every payment transaction in which no account-related relationship is established between the payment service provider and the payment service user should be recorded under number 6.” The current government justification repeats this standard purpose with the same content (see above ) .
The financial transfer business in the second alternative is fulfilled by services in which funds are “…received on behalf of the payee and made available to him…”. The second alternative involves financial transfer services where the payment service provider is “in the warehouse” of the payee. It is not important that the funds are expressly accepted and forwarded in the name of the recipient ( cf.factoring/assignment of claims below). Rather, it is crucial that the money is accepted for a third party, in other words, that from an economic point of view, a payment method is established in which the intended recipient ultimately receives the money. This corresponds to the basic legal concept of PSD 1 as well as PSD 2.
The law also does not stipulate a chronological order in which money flows . The directive, like the law, speaks of the transmission of a “corresponding amount”. The flow of money is therefore also a fact if the service provider first pays the money out to the payee (advances it) and later retrieves the amount of money with which he made the advance payment from the payer.
How the provider ultimately receives the amount of money to be transferred ( i.e. the type of payment method ), be it by bank transfer, direct debit, card payment, e -money or alternative payment methods including services for accepting cash payments, ultimately plays no role in law.
It is also irrelevant whether the service provider carries out the transaction through an actual cash flow (the transfer of cash or the forwarding of book money with the help of a separate collective account at a bank via the giro network) or through offsetting, for example via a system of two pots ( ” Hawala “). The decisive factor is the economic result of the financial transfer. The financial transfer business is not ruled out by the fact that the service provider makes use of an offsetting option to which it is entitled from another legal transaction.
As a payer, from whom the service provider accepts an amount of money, is not only to be considered the person who actually transfers an amount of money to the service provider or hands it over in cash. The payer within the meaning of the provision is also the person who can request the payment of a sum of money from the service provider and who instructs a third party to pay instead of the actual payment. It makes no difference whether a service provider who is obligated to pay his customer an amount of money for any legal reason whatsoever pays this amount of money to the customer and the customer then repays this amount of money to the service provider for forwarding to a third party. Or whether the parties refrain from paying the money back and forth and the service provider transfers the amount of money directly to a third party on the instructions of his creditor. This will make thePayment method only shortened ; this does not detract from the character of the service as a payment service.
The service provider does not have to arrange the entire payment flow from the payer to the recipient. According to the wording of the law and the official justification ( see above), it is sufficient if the service provider is only involved in the flow of payments on the side of the payer or the payee: The law initially names the services in which funds are “…only for the transmission of a corresponding amount to a payee or to another payment service provider acting on behalf of the payee…”. For example, so
– called Escrow services fall under which the provider, as a service for buyers and sellers ( e.g. in Internet trading portals ), accepts the purchase price payment in advance in trust on their own collective accounts and forwards the amount to the seller as soon as the buyer confirms that the goods have been handed over free of defects. In these cases, one and the same service is conceptually provided as well as the acquisition business as well as the financial transfer business, which as a catch-all event in a concrete individual case can take a back seat to the more specific event according to the overall picture of the service.
The provider of the aboveFor example, services do not constitute a fact if he himself enters into the basic transaction in full as a contractual party in such a way that he first buys the goods himself and then resells them to the end customer, taking over all rights and obligations. In the case of two independent sales transactions , ie two sales contracts that are processed independently of one another, even if they relate to the same business object, there is no transfer of funds and therefore no financial transfer transaction. The transaction does not become a money transfer transaction because the object of the transaction is transported or sent directly from the first supplier to the last customer ( chain transaction), as long as the basic rule ( two independent sales transactions that are processed independently of each other ) is not affected. However, if the second seller only formally concludes a purchase contract with the end customer, but refers this – with civil law effect or not – to the first seller due to possible material defects, so that from an economic point of view the actual purchase is concluded between the first seller and the end customer to qualify the second seller’s service outright as what it in fact only seeks to disguise , as a money transfer transaction. Of the
Even if the platform operator uses a licensed payment institution that handles the payment flow for the parties to the purchase/service contract , it does not operate the financial transfer business that requires a permit. However, it should be noted that the parties to the underlying transaction – seller and buyer – must each conclude their own contracts with the payment institution, since they – and not the platform – are payment service users. The platform operator, on the other hand, must not have any possibility of influencing the flow of payments, as otherwise he would exceed the limits of a technical service provider who does not require a license in accordance with Section 2 ( 1) No. 9 ZAG .
Examples of further application groups of the financial transfer facts are mentioned:
If the donor donates the funds to the funding corporation and this gives the funded legal entity funds from its own assets on the basis of its own decision and statutory obligation, the facts of the financial transfer business according to § 1 para. 1 sentence 2 no. 6 ZAG not fulfilled. In this case, there is no acceptance for the transmission of an amount on behalf of a payer or payee or both i. s.d. § 1 paragraph 1 sentence 2 no. 6 ZAGinstead of. There must be no obligation to pass on the funds to the donor or the recipient; however, there is no harm in expecting who the money should go to.
Insofar as liberal professions, such as lawyers, notaries and tax consultants, transfer funds outside of the typical activities defined in the professional regulations, this qualifies as a financial transfer business without further ado.
Factoring/assignment of claims
Frequently, the payee assigns his claim against the payer to the payment service provider for the purpose of collection. The provision of the money transfer business is not excluded in this constellation, even if the payment service provider is under civil law considerer collecting its own claim. Section 32 ( 6 ) KWG confirms that payment services can also exist in this constellation. This standard clarifies the competitive relationship with factoring , which may be relevant in such cases, in accordance with section 1 ( 1a) sentence 2 no. 9 KWG to the effect that payment institutions and e -money institutions do not require a separate permit for factoring as long as both facts are in a specific transaction collapse in these constellations is factoring so subsidiary. The report of the Finance Committee of the German Bundestag states:
“In the context of the processing of card payments and other electronic payments, it repeatedly happens that payment institutions, which will in future be subject to the Payment Services Supervision Act, buy claims against their customers/payers from the affiliated companies/payees. In these cases, regulatory factoring is often provided in accordance with section 1 ( 1a) sentence 2 no. 9 KWG , even if the objective pursued by the contracting parties is not aimed at financing but rather at processing payments .
A resulting threat of double supervision of payment institutions that will in future require a permit under Section 8 ( 1)must have ZAG , as well as additionally because of the provision of factoring i. s.d. Section 1 ( 1a) sentence 2 no. 9 KWG would require a permit in accordance with Section 32 ( 1) KWG would not be expedient, since the permit requirements for the financial service of factoring are significantly lower than the requirements for a permit i. s.d. § 8 para. 1 ZAG”.
In cases of assignment of claims, the existence of a money transfer business still depends on whether the service is aimed at processing payments and not at financing the contractual partner from an economic point of view. Payment processing will often be in the foreground if, despite the sale of receivables, the payee should only contractually be paid the fee for the sold receivables after the service provider has collected the assigned receivables from his accounts. The same applies, for example, in the case in which receivables are purchased as standard and without detailed credit checks. Assuming the default risk does not generally exclude the provision of payment services. In particular, when collecting direct debits and in the electronic direct debit procedure, one or the other service provider assumes the risk of default as an additional service to the payment service.
This also applies if a so -called fine trading / purchase factoring is operated, i.e. the service provider is in the warehouse of the debtor and pays on his debt. This is usually to be seen as conducting the money transfer business, unless the service provider enters into the purchase contract with the seller in full with all rights and obligations as a buyer, acquires the goods himself, and this on the basis of a further contract with the end buyer, again with the assumption of all rights and obligations in full, resold.
Private medical clearinghouses
According to BaFin ‘s consistent administrative practice, the scope of the financial transfer business must still be interpreted restrictively in that the facts of the case do not cover the business model of private medical clearinghouses.
- f) Payment initiation services (1 Para. 1 Sentence 2 No. 7 ZAG )
payment services 1 paragraph 1 sentence 2 no. 7 ZAG are payment initiation services. According to the definition of Section 1 ( 33 ) ZAG , the payment initiation service is a service in which the payment service user initiates a payment order in relation to a payment account held with another payment service provider.
The RegLimit. ZAG 2017 explains:
“The provision implements Article 4 number 3 in conjunction with Annex I number 7 of the Second Payment Services Directive. The new offense is defined in Article 4 number 15 of the Second Payment Services Directive, implemented in § 1 paragraph 33. According to this, payment initiation services are services that initiate a payment order with the aim of transferring money from one payment account to another payment account. They rely on having access to the payer’s accounts. If a payment initiation service provider only provides payment initiation services, it is not in possession of the payment service user’s funds at any point in the payment chain.
The payment initiation service provider does not carry out the payment process itself, but initiates it with an account-managing payment service provider. In this respect, he stands between the authorization of the payment transaction by the payment service user and the execution by the institution managing the payment account.
With the Second Payment Services Directive, payment initiation services are subject to a licensing and supervisory regime for the first time. This is intended to take into account the development of new technologies, particularly in the area of electronic business and payment transactions. Service providers have emerged there in recent years that enable access to the payment account of the payment service user in order to initiate payments via the Internet based on transfers. At the same time, these service providers can promptly give the payee certainty that the payment order has been transmitted. The payee can be prompted to release the goods immediately or to provide the service immediately.
The payment initiation service provider usually provides its services to the payment service user. A contractual relationship between the account-managing payment service provider and the payment initiation service provider for the purpose of providing the payment initiation service is not required.
The goal of the regulation is to minimize the risk of unauthorized payment transactions.
The account-managing payment service provider may not make the use of these services dependent on the payment initiation services concluding a contract with them for this purpose, see Section 675f ( 3) sentence 2 BGB .
Payment initiation services transmit payment orders . Section 675f paragraph 4 sentence 2 BGB . Simply submitting an authorization request is not sufficient. Informing the payer and, if applicable , the payee, cf. Section 675d ( 2) sentence 1 of the German Civil Code (Bürgerliches Gesetzbuch – BGB ) is not a requirement of the facts, but merely part of his obligations arising from the contract with the customer upon fulfillment of the facts.
The payment initiation services of technical service providers within the meaning of 2 Para. 1 No. 9 ZAG are to be distinguished .
Technical service providers who only transmit an authorization request and the data record for billing the payment never have access to the payment account due to the technical design.
However, if network operators – like other service providers in the payment chain – come into possession of customer funds at any point in the payment process or if they have the power of disposal over the amounts of money to be transferred, they can no longer rely on the exception for technical service providers within the meaning of Section 2 Paragraph 1 number 9 ZAG ( see below under 3 i]) and – depending on the design of the business model – the classic payment services, in particular the acquisition business within the meaning of § 1 para. 1 sentence 2 no. 5 ZAG , come into consideration.
No payment initiation services are available from so-called network operators who establish the electronic data connection between the payee’s terminal at the on-site cash register (POS terminal) and the card-issuing payment service provider when making payments using the electronic cash method (girocard). With this method, the payer has to enter his personal security details (card and PIN ) on site at the POS terminal. With this method, however, the further payment process is not processed via access to the payer’s online banking account.
Even when using the E -BICS interface, there is no access to the online banking account.
The electronic direct debit procedure (ELV) does not fall under the payment initiation services . ELV is a payment transaction initiated by the payee – not the payer (the payer only issues a SEPA mandate); the payee or his technical service provider does not have access to the payment account via the interfaces provided by the account-keeping office in the payer’s internet banking . In the ELV, the network operators limit themselves to the transmission of the electronic direct debit files from the payee to their payment service provider (collecting agency).
- g) Account information services (§ 1 Para. 1 Sentence 2 No. 8 ZAG )
payment services 1 paragraph 1 sentence 2 no. 8 ZAG are account information services. According to the definition of § 1 para. 34 ZAG , the account information service is an online service for communicating consolidated information about a payment account or several payment accounts of the payment service user with one or more other payment service providers.
The RegLimit. ZAG 2017 states:
“The provision implements Article 4 number 3 in conjunction with Annex I number 8 of the Second Payment Services Directive. In Article 4(16) (implemented in Section 1(34)), the Second Payment Services Directive defines account information service as an online service for communicating consolidated information about one or more payment accounts that a payment service user holds either with another payment service provider or with more than one payment service provider . With the Second Payment Services Directive, account information services are subject to a registration and simplified supervisory regime for the first time. Account information services provide the payment service user with consolidated online-Information on one or more payment accounts with one or more other payment service providers that are accessible via the online interfaces of the payment service provider that manages the account. The payment service user or his agent thus receives an overall view of his payment accounts at a specific point in time.
As a rule, there is no communication of information if the account information service provider establishes access to the payment account, but has no access to the customer data due to the technical design”.
The aim of the regulation is to protect the customer’s payment account-related data from unauthorized access. The law is based on a broad understanding of this service.
Online services that call up account information – themselves or through another account information service provider – from one or more payment accounts and – possibly further processed – forward them to the recipient are factual .
Section 1 (34) ZAG covers services regardless of who the addressee of the message is. A reference to a specific payment transaction is not required. It does not matter when the notification is made.
Only access to information from payment accounts and the payment transactions associated with them is factual, Section 51 ( 1) sentence 2 ZAG . Services that affect other accounts are not covered by the facts.
The provision of credit-relevant information about payment service users (information about creditworthiness using scoring methods) is not covered by the scope of 1 para. 34 ZAG , insofar as the underlying information is not retrieved from the online banking account, as well as online services for Business evaluations on behalf of a company (e.g. in accounting or in human resources of a company), insofar as the data exchange does not take place via access to the online banking account. There is no access to the online banking account when using the E-BICS interface before
According to the wording of Section 1 ( 34 ) ZAG , it must be an online service. The provision of software that runs exclusively on computers within the payment service user’s area of disposal therefore does not fall within the scope of the offence.
- Negative catalog of payment services ( 2 Para. 1 ZAG )
The services listed in § 2 Para. 1 ZAG are not payment services.
The RegLimit. ZAG 2017 shows limits for the misuse of design:
“[…] In addition, the exceptional circumstances of 2 paragraph 1 are only applicable under the condition that the operator does not choose an inappropriate legal structure that appears to be abusive overall; Legal constructions that obviously only serve the purpose of circumventing the reservation of permission do not meet the requirements to be disqualified as a payment service.
Anyone who , for example , issues a large number of payment methods for very small amounts, each of which would actually be license-free from the point of view of the “limited network”, but which build up to considerable payment volumes overall, could, from the point of view of abuse of design, invoke § 2 para. 1 no 10 ZAG are denied .
- a) Direct payments ( 2 Para. 1 No. 1 ZAG )
No payment services are payment transactions that are made exclusively as direct cash payments from the payer to the payee without intermediaries.
The regulation was taken over from the ZAG 2009. The RegLimit. ZAG 2017 explains:
“The provision corresponds to the previous § 1 paragraph 10 number 1. It implements Article 3 letter a of the Second Payment Services Directive”.
Already the RegBegr. ZAG 2009 explained what is actually self-evident:
“Payment transactions that are made exclusively as direct cash payments from the payer to the payee without intermediaries are not payment services within the meaning of this law. A payment service is already ruled out here due to the nature of the matter. However, the European legislator considers a corresponding clarification to be necessary; this rule should follow. The scheme implements Article 3(a) of the Payment Services Directive.”
There is nothing further to add to the official justification.
- b) Commercial agents and central regulators ( 2 Para. 1 No. 2 ZAG )
No payment services are payment transactions between the payer and the payee through a central regulator or commercial agent authorized by agreement to negotiate or complete the sale or purchase of goods or services solely on behalf of the payer or the payee.
The regulation was essentially taken over from the ZAG 2009. The RegBegr. ZAG 2017 from:
“The provision corresponds to the previous § 1 paragraph 10 number 2. It implements Article 3 letter b of the Second Payment Services Directive.
The exception has been made more specific by the Second Payment Services Directive compared to the First Payment Services Directive: The Directive now explicitly clarifies that commercial agents can only claim the area of exemption if they are authorized by agreement, either exclusively on behalf of the payer or exclusively negotiate or complete the sale or purchase of goods or services on behalf of the payee; not, however, if the commercial agent is in both camps.
The text of the directive was amended to address different application practices that had developed in the Member States on the basis of Article 3(b) of the First Payment Services Directive, some of which also went beyond the scope of the exemption provision. According to Recital 11 of the Second Payment Services Directive, this has led to risks for consumers and distortions of competition.
The clarification that has now been made in the Second Payment Services Directive corresponds to current supervisory practice in Germany and does not lead to any changes in this respect. The Federal Institute has already made the use of the previous area exemption dependent on the central regulator or commercial agent acting only for the payer or the payee. This practice is now confirmed by the Second Payment Services Directive.
It is also essential for the area exemption that the commercial agent has real scope for negotiating or concluding a sale or sale. purchase of goods and services. The commercial agent must therefore have a certain degree of decision-making or agency power with regard to the underlying transaction. Pure messenger activities, i.e. the mere forwarding of given declarations of intent, are not covered by the exception provision. Online platforms whose general terms and conditions regulate, for example, that the operator acts as a representative of the customer or the dealer or which specify certain conditions for contracts that are concluded via the platform, are generally not subject to the exception rule. Because the platforms concerned usually have no decision-making authority for the customer or dealer, but only contribute to the conclusion of the contract in an automated manner.
The central regulator, who only works for one side, is still covered by the exemption. In accordance with the previous provision, he should retain the option of not falling under the reservation of permission under this law, even without having to act as a central counterparty in the individual transactions for his associated companies; it is sufficient for central regulators to agree the terms and conditions with the customers or Always negotiate suppliers. The central regulator does not have to negotiate every single condition, and the affiliated companies are allowed to have some leeway. The eponymous focus of the central settlement is also in the settlement and, if necessary , crediting of the claims of the affiliated companies. The same applies to the activities of the central accounting offices, which are therefore also not subject to the law’s reservation of permission”.
The subject matter of the exemption provision is divided into two alternative courses of action: “negotiate” or “conclude” .
The concept of negotiation describes the agreement on the content of the basic transaction, i.e. in particular on the price and the quality of the object of purchase or the service. It is necessary, but also sufficient, if the commercial agent or central regulator has the opportunity to negotiate the conditions for the purchase/sale of goods and services without having to make use of this in each individual case. However, the corresponding authority must not only exist on paper. The commercial agent or central regulator must actually make use of it.
The term “closing” refers to the act of willing that the underlying transaction should come about under certain conditions. Here, too, it is necessary for the commercial agent or central regulator to have their own scope for decision-making.
If a commercial agent or central regulator with a corresponding power of attorney also accepts the payment for his principal, he does not provide a payment service ZAG . The commercial agent or central regulator does not provide a payment service for the payer because it is located in the payee’s warehouse. It also does not provide a payment service for the payee, since § 2 Para. 1 No. 2 ZAGintervene in his favour.
As can be seen from the amended text of the law and the above-mentioned justification for the law, the area exemption only applies if the commercial agent or central regulator acts either exclusively on behalf of the payer or on behalf of the payee ; Anyone who is on both sides of a legal transaction, such as a trading platform, cannot make use of the commercial agent exemption.
- c) Cash-in-transit company/value service provider ( 2 Para. 1 No. 3 ZAG )
The commercial transport of banknotes and coins, including their acceptance, processing and handover, are not payment services.
The RegLimit. ZAG 2017 states:
“The provision corresponds to the previous § 1 paragraph 10 number 3. It implements Article 3 letter c of the Second Payment Services Directive”.
Already the RegBegr. ZAG 2009 provided the following application help:
“The provision implements the corresponding requirement from Article 3 letter c of the Payment Services Directive.
The area exemption only covers activities in which only banknotes and coins are transported from the payer to the payee. “Commercial transport of banknotes and coins, including acceptance, processing and handover” is solely the physical receipt of cash from a customer, the processing of the cash in terms of bank preparation, the transport and the handover of the cash to the payee or an office designated by the payee . In this case, which today only covers a specific segment of a value service provider’s business activities, the company does not operate a payment service.
The provision of payment services by the value service provider, which is subject to authorization, may in individual cases be related to the processing of processes from cash withdrawal/supply by way of cash recycling /banknote recycling via accounts. The only decisive factor is that the activity is not limited to the mere physical receipt and handover, as is required by the exception rule. As a result, value service providers do not generally fall under the area exemption when processing transactions in connection with cash recycling or other cash withdrawal/supply via their own accounts and accordingly require a permit as a payment institution.
Services that in individual cases go beyond the activities covered by number 3 above, in particular if the funds are not transferred directly, but are transmitted to the customer via an account held by the cash-in-transit company/security service provider at a credit or payment institution, regularly no longer move in the area exception and are therefore classified as deposits or withdrawals via accounts (1 Paragraph 2 No. 1), as transfer transactions (§ 1 Paragraph 2 No. 2b) or as money transfer transactions 1 Paragraph 2 No.6) subject to authorisation. It is irrelevant that the client of the value service provider is usually also the recipient of the payment ( cf. Article 4 No. 10 of the Payment Services Directive). […]”
The security transport company /value service provider (value service provider) who brings cash to the nearest bank or Bundesbank branch for his client so that it is credited to his client’s account there operates the deposit business i. s.d. Section 1 ( 1) sentence 2 no. 1 alternative 1 ZAG . According to Section 2 Paragraph 1 No. 3 ZAGhowever, this service is not considered a payment service i. s.d. ZAG as long as the value service provider is limited to accepting, processing and handing over the cash. The provision regulates a special sub-case of technical assistance, which in principle is not considered a payment service i. s.d. ZAG is to be qualified and withdraws the application order under Section 1 Paragraph 1 Sentence 2 No. 1 ZAG , which would otherwise be too broad.
The forwarding of deposit countervalues from the cash disposal to an account of the respective customer – both with the involvement of the Individual NiKo deposit procedure as well as the collective NiKo deposit procedure (not account-linked deposit procedure at the Deutsche Bundesbank) – falls under 2 Para. 1 No. 3 ZAG . However, this presupposes that the value service provider does not assume any obligations in the contract with its customer that go beyond the provisions of Section 2 ( 1) No. 3 ZAG . 2 para. 1 no. 3 ZAGcovers the physical receipt of the cash, the banking processing, which also includes the exchange of funds in advance of a (collective) deposit at the Deutsche Bundesbank, and the delivery to the destination, which can also be a bank of the customer.
The exchange of coins for paper money or other denominations still falls under section 2 subsection 1 no. 3 ZAG . It does not matter whether this exchange takes place because of the deposit conditions specified by the Deutsche Bundesbank or for their own purposes, for example because the security service provider needs a specific denomination, e.g in order to supply its customers according to their needs ( “coin recycling” ). In the case of the exchange of coins for paper money specified by the Deutsche Bundesbank, a top-up with personal funds of a maximum of €4.99 that becomes necessary in individual cases is still processed as processing i. s.d. § 2 Para. 1 No. 3 ZAG classified. In order to carry out a cash exchange in advance of a collective payment, a clear contractual arrangement between the value service provider and its customer is required, which entitles the value service provider to carry out such a cash exchange.
However, the exception provision also applies to the ZAG2017 no longer if customers’ cash is transferred to their own accounts of the value service provider or (collective) trustee accounts held in the name of the value service provider .
- d) Reverse cash payments ( 2 Para. 1 No. 4 ZAG )
Services in which the payee hands over cash to the payer as part of a payment transaction after the payment service user has expressly asked him to do so shortly before executing a payment transaction for the purchase of goods or services are not considered payment services.
The RegLimit. ZAG 2017 explains the background and scope:
“The provision corresponds to the previous 1 paragraph 10 number 4. It implements Article 3 letter e of the Second Payment Services Directive.
In recent years, repeated cases have become known in which operators of amusement arcades regularly sell small goods – such as lighters, ballpoint pens, individual pieces of chewing gum – in order to enable the buyer to pay out cash as part of the cashless payment for the goods. Contrary to what was intended by the European legislator in Article 3 letter e, the payout in these cases does not only take place occasionally when goods and services are purchased, but also serves to ensure that the purchaser equipped with cash remains on the premises of the arcade operator in order to to spend withdrawn cash at the machines or other gaming opportunities. This differs from the “classic” cash payment at the retailer’s checkout, where the payer takes the withdrawn cash with him
Corresponding cases, in which the acquisition process is only a pretext for offering payment services, are to be classified as unauthorized circumvention of the reservation of permission according to Section 10 subsection 1 sentence 1. The exception according to number 4 cannot be claimed for these cases”.
Section 2 ( 1) no. 4 ZAG applies to cash payments at the cash register following a purchase of goods ( cash-back services provided by merchants at the point of sale ).
The payer (“customer”) expressly asks the payee (“business owner”) to hand over cash shortly before executing a payment transaction to purchase goods or services. The customer’s non-cash payment includes the equivalent value of the goods or services plus the amount that the business owner hands over to the customer in cash.
Upon presentation of his debit or credit card, which is inserted into a reader provided for this purpose at the cash register and into which his personal identification number ( PIN ) is entered (electronic cash procedure), the customer can have his payment account debited to his account-keeping institution, which authorizes and guarantees payment to the business owner online, hand over cash. The business owner can make use of Section 2 Paragraph 1 No. 4 ZAG ; the service is therefore not covered by the ZAG as a payment service . In addition, the business owner does not need a banking license, since the online authorized and guaranteed payment is not considered a credit transaction in accordance with Section 1 ( 1) sentence 2 no. 2 KWG .
The legal situation is fundamentally different if only the debit or credit card is inserted into the reader provided, but not the PINis entered. The reader reads the data from the card, asks a central office if the card should be blocked and, if the card has not been blocked, generates a direct debit authorization that the customer has to sign. Without online authorization and payment guarantee from the account-holding bank, Section 2 Paragraph 1 No. 4 ZAG may still apply; however, the business owner generally requires a license to operate the lending business Section 1 ( 1) sentence 2 no. 2 KWG .
The regulation of § 2 para.1 No. 4 ZAG , however, only requires that goods or services are purchased and that cash is handed over in connection with the cashless payment of the purchase. The law does not stipulate a specific minimum purchase amount. Nevertheless, the area exemption cannot be claimed if, overall, the purchase of low-value goods or services is obviously only put forward in order to circumvent the reservation of permission. This provision does not apply
to the operation of cash dispensers .
- e) Currency exchange transactions ( 2 Para. 1 No. 5 ZAG )
No payment services are money exchange transactions that are settled in cash. Similar to No. 1, this provision is also more of a clarification than an exception.
The RegLimit. ZAG 2017 keeps this short:
“The provision corresponds to the previous § 1 paragraph 10 number 5. It implements Article 3 letter f of the Second Payment Services Directive”.
And also not much more detailed the RegBegr. ZAG 2009:
“The regulation is also more of a clarification than an exception. Currency exchange transactions that are carried out in cash, including currency transactions, are not intended to be payment services within the meaning of this law. In essence, this is not about a payment transaction, but about the exchange of means of payment. The provision implements the corresponding requirement from Article 3 letter f of the Payment Services Directive.
As a financial service within the meaning of section 1 ( 1a) sentence 2 no. 7 of the KWG , foreign currency transactions still require a permit in accordance with section 32 ( 1) of the KWG .”
Section 2 ( 1) no. 5 of the ZAGclarifies that cash exchange transactions are not payment services. The money exchange only provides the payer with the local means of payment. The money changer is not involved in the payment process itself; he doesn’t even nudge him. Conversely, money exchange transactions that run through payment accounts can be considered payment services 1 para. 1 sentence 2 no. 1 or 2 ZAG .
- f) Cheques, bills of exchange, vouchers and postal orders (§ 2 Para. 1 No. 6 ZAG )
No payment services are payment transactions based on one of the following documents, which is drawn on the payment service provider and provides for the provision of an amount of money to a payee:
- a) a paper check Check Act or a comparable check in paper form under the law of another member state or another state party to the Agreement on the European Economic Area,
- b) a bill of exchange in paper form i. s.d. Bill of Exchange Act or a comparable bill of exchange in paper form under the law of another member state or another state party to the Agreement on the European Economic Area,
- c) a paper voucher,
- d) a paper travelers check or
- e) a paper money order as defined by the Universal Postal Union .
The RegLimit. . ZAG 2017 summarizes this briefly:
“The provision corresponds to the previous § 1 paragraph 10 number 6. It implements Article 3 letter g of the Second Payment Services Directive”. The RegBegr
was not much more detailed . ZAG 2009:
“The provision creates an area exception for payment transactions based on bills of exchange, cheques, vouchers, travelers checks or postal orders that are drawn on the payment service provider. They are not considered payment services within the meaning of this law. […]
The provision implements Article 3(g) of the Payment Services Directive. The provision finally defines the group of documents to be considered for the area exception. The collection of checks is banking business and falls under section 1 (1) sentence 2 no. 9 KWG .”
Section 2 ( 1) no. 6 ZAG privileges the documents finally listed there.
Not under § 2 paragraph 1No. 6 ZAG includes electronic transactions that are simply referred to as checks or vouchers , even if they are legally otherwise constructed analogously. Electronically initiated transactions that are only converted to paper in the course of the payment process do not fall under Section 2 ( 1) No. 6 ZAG , as they are not initiated with the document.
- g) Payment transactions within payment and securities settlement systems (§ 2 Para. 1 No. 7 ZAG )
Pursuant to Article 2 Paragraph 1 No. 7 ZAG , payment transactions that are processed within a payment or securities settlement system between payment settlement agents, central counterparties, clearing houses or central banks and other participants in the system and
payment service providers are not considered payment services.
The area exception materially reflects the corresponding provision from the ZAG 2009; the RegBegr. ZAG 2017 to:
“The provision corresponds to the previous § 1 paragraph 10 number 7. It implements Article 3 letter h of the Second Payment Services Directive”. The RegBegr
was a little more detailed . ZAG 2009, which in this respect also applies without restriction under the ZAG 2018:
“Meanwhile, however, only the settlement transactions between the authorized payment service providers should be privileged. The condition is therefore that in each individual case the service recipient as a domestic payment institution has a license from the Federal Financial Supervisory Authority in accordance with Section 8 ( 1), as a payment institution from another member state or contracting state of the Agreement on the European Economic Area, a license in accordance with Article 10 of the Payment Services Directive, or that he falls under one of the special categories of Article 1 ( 1) (a), (b), (c), (e) or (f) of the Payment Services Directive, or that, as an institution from a third country, it maythe existing reservation of permission is observed. The institution does not have to have gone through the notification procedure in accordance with Article 25 of the Payment Services Directive
. “ZAG . If the company enters into a contractual relationship directly with the payer or the payee as part of a payment transaction, the appeal to § 2 Para. 1 No. 7 ZAG is ruled out.
- h) Interest and dividend payments from authorized institutes or capital management companies (§ 2 Para. 1 No. 8 ZAG )
No payment services are payment transactions in connection with the servicing of securities investments, which are carried out by the companies falling under number 7 or by credit institutions, financial service institutions or capital management companies within the scope of their permission under the German Banking Act or the Capital Investment Code.
The ZAG 2018 essentially adopted the provision from the ZAG 2009; in this sense also the RegBegr. ZAG 2017:
“Regulation number 8 largely corresponds to the previous § 1 paragraph 10 number 8. It implements Article 3 letter i of the Second Payment Services Directive. The execution of the payment transactions within the scope of a permit under the Investment Act has ceased to apply due to its repeal”.
The RegLimit. ZAG 2009, which is also valid without restrictions under ZAG 2018, explained:
“Investments in securities and related dividends, income or other distributions or their redemption or sale, which are to be carried out by the companies mentioned under number 7 or by credit institutions, capital investment companies or financial services institutions providing investment services within the scope of their authorization under the Banking Act or the Investment Act not be payment services within the meaning of this law. The provision implements Article 3(i) of the Payment Services Directive.”
There is nothing further to add to the official explanation.
- i) Technical infrastructure services (§ 2 Para. 1 No. 9 ZAG )
No Payment Services are services provided by technical service providers who contribute to the provision of the Payment Services but at no time come into possession of the funds to be transferred; this includes the processing and storage of data, trust-building measures and services to protect privacy, message and entity authentication, provision of information technology and communication networks, and provision and maintenance of the terminals and facilities used for payment services; each with the exception of payment initiation services and account information services.
The RegLimit. ZAG 2017 explains:
“The provision largely corresponds to the previous § 1 paragraph 10 number 9. It implements Article 3 letter j of the Second Payment Services Directive. In accordance with the requirements of the guideline, it is added that payment initiation services and account information services are not services within the meaning of number 9.
The technical service providers – such as payment initiation services and account information services – never come into possession of the funds to be transferred. It cannot be ruled out that the technical service provider enters into a direct contractual relationship with the payer. This follows from the examples contained in the definition. The service provider also acquires “possession” of funds if he is not the owner of the accounts through which the funds flow, but only exercises the authority to issue instructions to the executing payment service provider. If only the service provider and not the payment service user has control over the funds vis-à-vis the executing payment service provider or cannot be excluded from this due to the contractual design, the service provider cannot invoke the exception provision for technical service providers. The sale of technical infrastructure services (e.g. processors for card payments) remains covered by the exception.
- 2 para. 1 no. 9 ZAG 2018 covers providers who only provide purely technical services that support the operation of the payment institution, who never come into possession of the funds to be transferred and who also do not provide payment initiation or account information services in 33 and 34 ZAG 2018 . _ Providers of purely technical services must therefore meet threerequirements:
- 2 para. 1 no. 9 ZAG excludes – first requirement – purely technical services from the scope of the law. According to the example list in Section 1 Paragraph 1 No. 9 ZAG , this includes the processing and storage of data, trust-building measures and services to protect privacy, message and instance authentication, the provision of information technology and communication networks and the provision and maintenance of payment services end devices and facilities used.
Regardless of the wording of 1 Para. 1 No. 9 ZAGapplied typology ( cf. “Processing … of data”), the mere forwarding of transaction data can also be qualified as a purely technical service, as long as the threshold for the provision of payment initiation or account information services within the meaning of 1 para. 33 and para. 34 ZAG – the third requirement – is not exceeded. This is exceeded if, for example, the service provider can access the online banking account using the personalized security features.
The purely technical services support the operation of the payment service provider; they are regularly provided to the payment service provider, who in turn offers payment services within the meaning of Section 1 ( 1) sentence 2 ZAG for payment service users ( cf. wording “contribute to the provision of payment services”). Nevertheless, providers of purely technical services can also support a payment service provider if they enter into direct contractual relationships with the payment service user; in this respect, they must limit themselves to the provision of purely technical services.
At no time in possession of the funds to be transferred
However, it is not sufficient that the activities of the technical service provider are purely technical services. The second requirement is that the technical service provider must never come into possession of the funds to be transferred .
Amounts of book money are receivables (to the bank holding the account) that are not physically tangible if they are also shown in accounting records that can be shown on paper. Possession therefore only makes sense in the sense of a power of disposal to understand. Not only must the money to be transferred not go through an account in the name of the technical service provider (own account); it must also not run through a third-party account over which the service provider has power of disposal. It may not even be temporarily parked in an account that the technical service provider can access on the basis of an account authorization (which can be revoked at any time). The technical service provider must then ensure that he is not only temporarily granted account authority for an account through which the funds to be transferred can be routed. He simply must not have access to the funds at any time.
The provider, for example on the basis of contractual agreements (so -called acceptance contracts) with payees ( e.g. merchants) who provide the service of processing card payments and other payment transactions ( so -called commercial service providers) will generally fall under the acquisition business within the meaning of Section 1 ( 35 ) ZAG if they are in possession of the funds arrives, in other words has access to the funds.
This also applies to the central service provider, whose technical infrastructure is usually used by the commercial service provider ( so -called technical service provider), provided that the technical service provider enters into direct contractual relationships with the payment service users, which in turn includes the payment service of the acquisition business according to § 1 Para. 1 Sentence 2 No. 5 ZAG .
However, commercial service providers only fall outside the scope of the ZAG if their contractual relationship with payment service users is limited to purely technical services ( e.g the rental or sale and maintenance of payment terminals and the mere forwarding of transaction data from the payment terminals to a technical service provider). However, this construction will regularly lead to the technical service provider taking over the processing of card payments and other payment transactions. He then operates the acquisition business according to Section 1 Paragraph 1 Sentence 2 No. 5 ZAG .
At least one of the two service providers, be it the technical or the commercial one, will always provide a payment service.
No payment initiation and account information
services Finally – the third requirement – the provider’s service must not be classified as a payment initiation and account information service within the meaning of Section 1 ( 34) and ( 35 ) ZAG ( cf. wording: “ each with exception …”).
With the clarification, the service of payment initiation and account information – which has a common intersection with the purely technical services – is typologically lifted out of the scope of the area exception of § 2 Para. 1 No. 9 ZAG and the permit or Registration reservation of § 10 paragraph 1 sentence 1 or 34 paragraph 1 sentence 1 ZAG , although these service providers by definition do not come into contact with the funds of the customers – second requirement – come into contact.
- j) Payment systems in limited networks or with a limited range of products and instruments for social or tax purposes (§ 2 Para. 1 No. 10 ZAG )
Pursuant to Section 2 ( 1) No. 10 ZAG , payment services do not include services based on payment instruments that are used exclusively
- aa) for the purchase of goods or services on the issuer’s business premises – cf. PSD 2 recital 13 “… at a specific Retailers” ( shop-in-shop solution, house card)
for the acquisition of goods or services within a limited network of service providers under a business agreement with a professional issuer ( limited network, limited network )
- bb) for the acquisition of goods or services from a very limited range of goods or services ( very limited goods – and range of services, limited range)
- cc) can be used for the acquisition of goods or services for specific social or tax purposes in accordance with public law provisions at the request of a company or public body on the basis of a commercial agreement with the issuer (instruments for social or tax purposes)
The RegLimit. ZAG 2017 provides the following assistance for delimiting the material scope of application:
“The provision corresponds to the previous § 1 paragraph 10 number 10. It implements Article 3 letter k of the Second Payment Services Directive. In contrast to the first Payment Services Directive, the exception was further specified in the Second Payment Services Directive. This specification largely corresponds to the current administrative practice of the Federal Agency under the previous legal situation. […]
Insofar as the statutory requirements are met, for example customer cards, fuel cards, membership cards, public transport tickets, parking tickets, meal vouchers or vouchers for certain services can be the subject of the area exemption ( cf. recital 14 of the Second Payment Services Directive).
According to the statements in recital 14 of the directive, the area exception according to number 10 no longer applies if an instrument with a specific purpose develops into an instrument for general use”.
The area exceptions, which are regulated under § 2 Para. 1 No. 10 Letter a or c ZAG , can only be used for payment instruments that are used exclusively domestically as intended; for letter c this is expressly regulated in the law, for letter a this follows indirectly from the specification of the limitation of the network.
The payment instrument can be designed in different ways, for example as a card with a magnetic stripe or chip or other digital data carrier; Technical applications such as application software ( so -called applications – apps) and authorization codes are also recorded .
Each payment instrument can only make use of one of the area exceptions that are regulated under Section 2 Paragraph 1 No. 10 Letters a, b and c ZAG ; the individual facts exclude each other conceptually, there is no logical room for a combination of the facts.
The functional limitation must be ensured in a suitable manner, usually through technical precautions and in the contractual agreements that are used.
The typifications are exemplary and not final listings, which are subject to a different classification due to the special features of the individual case, eg as a result of technological innovations. BaFin
if the total value of the payment transactions has exceeded 1 million euros in the previous 12 months, to make a report in accordance with Section 2 ( 2) ZAG ( cf. Recital 14 of the Second Payment Services Directive).
Letter a (house card or limited network)
(1) First use case: shop-in-shop solution, house card
The first variant of the offense includes services based on payment instruments that are only used for the purchase of goods or services on the business premises of the Issuers can be used.
The RegLimit. ZAG 2017 provides the following application note for this:
“…The first alternative includes services based on payment instruments that can only be used to purchase goods or services on the issuer’s premises. The shop-in-shop solutions are recorded. The operator of a department store allows self-employed entrepreneurs to use parts of his sales area for their sales business. If the department store operator issues a payment instrument, such as a prepaid debit card, there is nothing to prevent these cards from also being used as a payment instrument for purchases in the shop-in-shops with reference to this alternative. The monetary values that are stored on these cards apply in accordance with Section 1 Paragraph 2 Clause 3 Half Clause 2 i.V. m § 2 paragraph 10 letter a alternative 1 not as e -money, even if the system experiences a limited three-sidedness through the inclusion of the shop-in-shops…”
Accordingly, the shop-in-shop solutions are recorded. The operator of a department store allows self-employed entrepreneurs to use parts of his sales area for their sales business. If the department store operator issues a payment instrument, such as a house card , there is nothing to prevent these cards from also being used as a payment instrument for purchases in the shop-in-shops with reference to this exception.
Among the first use case This also applies to the issuer who operates a shopping mall comparable to a department store , as long as the building situation that characterizes the facts (“everything under one roof”) still exists.
The individual petrol station operators who use the station cards they issue to settle accounts at their petrol station are also recorded.
On the other hand, separate sales outlets in the form of a building complex or a spatially enclosed area, such as shopping centers , malls, outlet villages, do not fall under this case group, because the framework of a shop-in-shop solution is no longer typologically given: ” shop next to shop ”, see the second use case.
According to the wording “business premises”, the payment instrument cannot also be used for the purchase of goods or services in the online shop of the third party ( so -called ” shop-in-shopper “).
(2) Second use case: limited network
The second variant includes payment services within a so -called limited network, ie payment instruments for the purchase of goods or services within a limited network of service providers within the framework of a
business agreement with a professional issuer.
The RegLimit. ZAG 2017 provides this interpretation aid:
“…The second use case regulates services based on payment instruments that can only be used within a limited network of service providers linked to one another by a commercial agreement with a professional issuer, that is, service provider. This means either purchasing from a specific retailer or service provider, or from a specific retail chain, if the entities involved are directly linked by a commercial agreement which, for example, provides for the use of a single payment brand and this payment brand is also used in the points of sale and – if possible – is listed on the payment instrument that can be used there ( cf.in this respect Recital 13 of the Second Payment Services Directive).
The limited network precludes the cross-deployment of a single instrument in two or more networks.
A professional issuer within the meaning of the provision is someone who, as a third party, fulfills the commercial and technical requirements for the task, i.e. who ensures that payments are processed properly and carefully manages the amounts of money that are often paid in advance”.
An example is the customer card (or similar designation) issued by a particular chain of stores, which can be used to make purchases in the individual stores of the chain of stores. The type of operation, e.gin addition to your own business, in a cooperative or group of companies, through agencies or franchisees, is not important. The decisive factor is the uniform market presence , which can result from the use of a uniform payment brand in accordance with Section 1 ( 28 ) ZAG , e.g. a symbol, a brand or a logo or the like ( cf. PSD 2 recital 13: “… or a specific retail chain, where the entities involved are directly linked by a commercial agreement, e.g. providing for the use of a single payment brand…”). The uniform payment mark acc.§ 1 Para. 28 ZAG should be used in the acceptance points and, if possible, listed on the payment instrument that can be used there.
Uniform market presence
Pursuant to section 1 ( 28 ) of the ZAG , a payment mark is any real or digital name, any real or digital term, any real or digital sign, any real or digital symbol or any combination thereof that can be used to indicate the payment card system under which it is used card-based payment transactions are carried out.
The RegLimit. ZAG 2017 states:
“The definition will be newly included in the law. The provision implements Article 4(47) of the Second Payment Services Directive.
A trademark is the representation or combination of one or more signs that are circulated in writing, visually or acoustically and are recognizable to the recipient in relation to the product or service. Among other things, the following can be considered: Letters, characters, words, colors, names, slogans, symbols, images, sounds, sound sequences, patterns, visual arrangement, etc. In view of the rapidly advancing digitization, brands are becoming increasingly important in order to ensure fast, error-free assignment of the product or service by the customer.
The payment mark is used to identify the payment card system under which card-based payment transactions are carried out. The following identification marks can be used as a payment mark: Symbols of credit institutions and other issuers, logos of credit card organizations, symbols of debit card providers, the symbol for so -called ” Pay Before Card ” systems. Because the definition is technology-neutral, it is open to future technical innovations.”
In addition, payment marks in this sense can also be other (trade) marks, logos and the like that ensure acceptance under a uniform market presence .
The payment instrument can be both physically on siteas well as in the internet shop, provided that only the goods or services that are physically offered on site can be purchased with it on the internet. Therefore, the operator of a pure Internet marketplace, on whose platform other providers offer goods or services, can not make use of the area exemption.
This area exception also includes cards for universities, factory premises, hospital and home premises, penal institutions, football or event stadiums, halls and stages and customer cards from shopping centers, malls and outlet villages as well as those from a specific holiday resortClub cards issued for payment of goods or services purchased within the facility.
In the case of municipal purchasing and service associations, so -called city cards, a limited network of service providers can usually still be accepted if they are limited to the immediately adjacent two-digit postcode districts ( e.g. City Card Hanover , with post code districts 29 and 31). Hamburg (postal code 20 and 21), Frankfurt (postal code 60, partly 65) and Munich (postal code 80 and 81), which each fall into two postal code districts, are regarded as one postal code district ( e.g. City-CardMunich can also be used in postal code districts 82 and 85; Frankfurt also throughout 65, 61, 63 and 64).
The payment instrument may only be used within a limited network, ie use outside the limited network and mutual acceptance of payment instruments from different issuers must be ruled out.
A characteristic of the professional issuer is its legal separation from the acceptors. This means that there must be at least one acceptor who is not an issuer.
Letter b) Limited range of goods and services, limited range
Letter b – third use case – privileges the use of payment instruments that are intended to be limited to the purchase of goods or services from a very limited range of goods or services.
Regarding letter b (limited range of goods or services) , RegBegr. ZAG 2017 the following interpretation aid:
“The third use case for the area exception is when the customer card only covers a very limited range of goods or services. According to Recital 13 of the Second Payment Services Directive, the decisive factor here is that the effectiveness of the instrument is limited to a fixed number of functionally related goods or services; In this respect, the geographic dimension plays no role, since in these cases of the specified range of goods or services, the purpose of use is independent of the geographic location of the point of sale. For example, customer cards for individual transport (fuel cards), where the following applies in principle: Everything that moves the car (fuel, lubricants) falls under the exception, but not what moves people (Shopware)”.
Of So- called limited range can be assumed for fuel cards , for example , if they only enable the purchase of vehicle-related goods and services whose functionality is exclusively subject to the premise “Everything that moves the car” . This includes fuel and lubricants, as well as additional products (Add Blue, etc. ), accessories ( e.g. windscreen wipers), vehicle washes, repairs as well as tolls and ferry and parking fees. Under the above circumstances, cross-border use of the fuel card is harmless from BaFin ‘s point of view . However, any type of travel requirements are no longer covered by the area exemption. In this respect, the area of application for the area exception in relation to fuel cards has narrowed in accordance with the guidelines.
So – called network payment systems in local and long-distance public transport are also covered by the area exception, provided that the purchase is limited under the premise “everything that affects the journey” and includes travel costs, train restaurants and Park & Ride parking facilities, but not goods and services at train stations or similar.
The area exemption also includes payment instruments for the purchase of goods that are Clothing including shoes and accessories such as bags, jewelry, cosmetics, fragrances and the like are limited, ie serve the “appearance of a person”. Other payment instruments could be used to a limited extent for the treatment of the person in the form of skin care, makeup, hairstyle and the like ( so -called beauty cards ). In addition to visiting the training facilities, payment instruments for services relating to fitness can also be used to purchase drinks and additional products such as sports clothing, nutrition and training accessories offered on their premises.
A functional limitation applies to payment instruments for streaming films and music. It is to be assumed for cinema tickets that are limited to visiting cinemas, including the stimulants offered on their premises; the same applies to amusement park tickets. A limited range is also to be assumed for payment instruments for the purchase of
– print media , including newspapers and magazines,
– books , including audio books and files, including downloads, excluding newspapers and magazines.
A functional limitation is e.g also applies to products and services related to animals (animal supplies and food).
It is also conceivable, for example, to use canteen tickets that are made available to employees and visitors within a group of companies, unless the fourth application (letter c, instruments for social or tax purposes) takes precedence as a more specific regulation.
The payment instrument can also be used to purchase goods or services in the online shop of the acceptance points, provided that the area of use does not go beyond the limited range of goods or services that can be physically purchased.
Letter c) Instruments for social or tax purposes
Regarding letter c (instruments for social or tax purposes) , RegBegr . ZAG 2017 from:
“This provision has been newly inserted to implement Article 3(k) group iii of the Second Payment Services Directive.
Accordingly, no payment services are services based on payment instruments that are subject to regulation by a national or regional public body for specific social or tax purposes for the purchase of specific goods or services ( cf. Recital 13 of the Second Payment Services Directive)”.
The report of the Finance Committee of the German Bundestag explains in addition:
“The replacement of the word “certain” with the words “specific” is an editorial clarification of one already contained in the regulatory text of Section 2 Paragraph 1 Number 10 Letter c ZAG – E ( cf. “according to the provisions”) Specification according to which the respective public law regulations determine the area of application of the payment instrument. […].”
The fourth variant of the offense deals with instruments for social or tax purposes. As a more specific regulation, the “Purpose Card” takes precedence over the third use case. It is an instrument for the purchase of goods or services for specific social or tax purposes in accordance with public law at the request of a company or public body on the basis of a commercial agreement with the issuer. According to Recital 14 of the Second Payment Services Directive, use cases may be “… vouchers for specific services, sometimes subject to a specific tax or labor law framework that encourages the use of such instruments to meet social legislation objectives…”.
The “Purpose Card” therefore includes, for example:Cards for eating and drinking in a social facility (consumption card) or for visiting the doctor or for participating in a rehabilitation measure (treatment card) , occupational health measures (§ 3 No. 34 EStG ), meal vouchers and recreation allowances ( 40 Para. 2 No. 1, 1a, 3 EStG ), travel allowances (§ 40 Para. 2 EStG ), personal attention (benefits in kind from the employer such as flowers , stimulants, a book or a recording given to the employee or his relatives on the occasion of a special personal event, R. 19.6, para.1 wage tax guidelines – LStR), and basic benefits for asylum seekers (§ 3 AsylbLG).
Instruments that are issued for an indefinite number of different products or services with cumulatively significant payment volumes ( cf. PSD 2 recital 13) are no longer a “purpose card”. This can be the case , for example , if , in addition to the services specified above, other services can also be purchased with the same card or if the public-law regulations no longer adequately limit the area of use of the card ( e.g. general benefits in kind according to Section 8 Para. 2 sentence 11 EStG and according to § 37b EStG ).
Excursus: prepaid cards/e-money balance
According to § 1 Para. 2 Sentence 4 ZAG , e -money is not (and therefore not subject to authorization according to the ZAG ) if a monetary value is stored on payment instruments within the meaning of § 2 Para. 1 No. 10 is stored. The use of each area exception according to § 2 Para. 1 No. 10 ZAG usually requires that the electronically stored amount per payment instrument does not exceed 250 euros, for rechargeable payment instruments the total payment volume does not exceed 250 euros in the calendar month.
Section 1 ( 1) sentence 2 no. 1 KWG remains unaffected.
- k) Payment transactions in electronic communication networks/services (2 Para. 1 No. 11 ZAG )
No payment services are payment transactions which are made available by a provider of electronic communications networks or services in addition to electronic communications services for a subscriber to the network or service and which
- a) are associated with the acquisition of digital content and voice services, regardless of the acquisition or consumption device used in the digital content and billed on the relevant invoice, or
- b) executed from or through an electronic device and billed on the relevant invoice as part of a charitable activity or for the purchase of tickets,
provided that the value of a single payment does not exceed EUR 50 and the cumulative value of the payment transactions of a single participant does not exceed EUR 300 per month.
The RegLimit. ZAG 2017 explains in more detail:
“The provision implements Article 3 letter l of the Second Payment Services Directive and replaces the previous Section 1 Paragraph 10 Number 11.
As payment services, the Second Payment Services Directive covers the billing and collection of fees for telecommunications services, information services, telecommunications-based services and authorization codes for participation in events a telecommunications company to the customer for other providers (value-added services) and the payment transactions that the telecommunications company handles for other providers because of their telecommunications services (pure telephony).
The European legislator has summarized the telecommunications industry-specific area exceptions for the payment services supervisory law in Article 3 letter l of the Second Payment Services Directive. The background to the new version is the different application of the corresponding provision in the First Payment Services Directive in the Member States, which is said to have led to a lack of legal certainty for operators and consumers. The new regulation specifies the already existing area exception and restricts the right of these payment service providers to make use of the exception by explicitly designating the types of payment transactions to which it applies ( cf. Recital 15 of the Second Payment Services Directive).
According to its wording and the recitals, Article 3 letter l only covers the payment transactions via the telecommunications company with which information services, telecommunications-supported services and authorization codes are billed because of participation in events; Payment transactions that the telecommunications company processes for other providers because of their telecommunications services (pure telephony) are not included in the concept. However, the exception is equally applicable to the latter in order to avoid an obvious contradiction in valuation.
Only the providers of electronic communication networks or electronic communication services can make use of the area exemption. The regulation does not apply to other companies that provide payment services in this context. The electronic communication networks and electronic communication services are defined in 1 paragraphs 12 and 13.
According to the requirements of the Second Payment Services Directive, the billing of value-added services under the area exception requires that the provider of the electronic communications network or service provides electronic communications services for a subscriber to the network or service and also the type of services referred to in Article 3 letter l Payment transactions (additionally) for other providers of this type. The payment transactions must be provided in connection with the purchase of digital content and voice services.
The threshold values of 50 euros per payment transaction and a cumulative value of 300 euros per participant and month specified by European legislators apply to both area exceptions. According to the explanations in Recital 15 of the Second Payment Services Directive, the area exemption is to be limited to payments with a low risk profile. In addition, according to the requirements in paragraph 3, there is a reporting obligation specified by the Second Payment Services Directive.
Re letter a (digital content and voice services)
Operators of electronic communications networks or services may benefit from the area exemption when the purchase of digital content and voice services coincides with the consumption of the electronic communications network or service. The device used to purchase or consume the digital content is irrelevant.
Digital content is defined in Article 4(43) of the Second Payment Services Directive (transposed in 1(27)) as goods or services that are produced and supplied in digital form, the use or consumption of which is limited to a technical device and which in no way involves the use or entail the consumption of goods or services in physical form ( e.g. software, Wallpapers, Music, Movies, Ringtones).
Voice services include entertainment ( e.g. chats) and information services ( e.g. weather or stock market announcements, wake-up calls, talk therapy services) as well as participation in television and radio programs such as voting, competitions and live feedback .
Re letter b (non-profit nature of the billed activity or billing of electronic tickets)
This rule excludes payment transactions that are made from or through an electronic device and are charged for the purchase of tickets or on the corresponding invoice as part of a charitable activity. The use of smartphones for ticket purchases, which is practically on the rise, should remain cost-effective for customers and operators, which is ensured by the privileged purchase of tickets and the thresholds for small-amount payments. Electronic tickets are valid for a variety of purposes – be it transportation, entertainment, parking and entry to events – but not for physical goods. In addition, the area exemption is intended to reduce the burden on bodies that collect donations for charitable purposes ( cf.Recital 16 of the Second Payment Services Directive)”.
For the definition of electronic communication networks, RegBegr. ZAG 2017 the following explanations: “The definition of electronic communication networks is newly included in the law. Section 1 ( 12 ) ZAG implements Article 4 number 41 of the Second Payment Services Directive. This in turn refers to Article 2 (a) of Directive 2002/21/ EC (as amended by Directive 2009/140/ EC ). This regulation describes electronic communication networks as “transmission systems and, if necessary, switching and routing equipment and other resources- including the non-active network components – that enable the transmission of signals via cable, radio, optical or other electromagnetic devices, including satellite networks, fixed (circuit and packet-switched, including the Internet) and mobile terrestrial networks, power line systems, insofar as they are used for signal transmission radio, television and cable television networks, regardless of the type of information transmitted”. As a result, it must be a technical device that functionally enables signal transmission via certain electronic media ( cf. Section 3 number 27 TKG; cf. Geppert/Schütz, BeckTKG-Komm, 4th edition 2013, 3 para.87). Access to and functionality of electronic communication networks are of increasing importance for payment service providers, since their service is based on the transmission of data records via these networks. The term electronic communication network is formulated in a technology-neutral way in order to include not only the existing technical possibilities with regard to electronic communication networks but also electronic communication networks that will develop in the future. The term includes all forms of contact between two parties (sending party and receiving party) that is made possible via a technical device, such as cable, radio, satellite, terrestrial networks, power line systems, etc.Apart from a direct personal exchange of information between two parties, this should cover any contact made via a technical device of any kind.
The definition of electronic communication services is also newly included in the law. Section 1 ( 13 ) ZAG implements Article 4 number 42 of the Second Payment Services Directive. This in turn refers to the legal definition in Article 2 (c) of Directive 2002/21/ EC. According to this, electronic communications services are usually services provided for a fee that consist wholly or mainly in the transmission of signals over electronic communications networks, including telecommunications and transmission services in broadcasting networks, but excluding services that offer content over electronic communications networks and services or an editorial control over they exercise it does not include information society services i. s.d.Article 1 of Directive 98/34/EC, which does not consist wholly or predominantly in the transmission of signals over electronic communications networks. This means that the service has a focus on the transport service (“entirely or predominantly”), but not on a content-related service. The assignment of a service to a telecommunications service can be problematic if the service consists of both a transport service and a content-related service ( cf. section 3 number 24 TKG; cf. Geppert/Schütz, BeckTKG-Komm, 4th edition 2013, section 3 para. 79)”.
Basically not from the ZAGPayments are recorded that telecommunications companies carry out for their own services with their customers exclusively in their own name and on their own account ( so -called online billing ), since in this respect no payment service is provided due to the lack of three – way communication. On the other hand, payment transactions that the telecommunications company bills for services from other providers, collects and forwards to the provider ( so -called offline billing in the fixed network and factoring model in mobile communications), at least constitute the financial transfer business of Section 1 ( 1) sentence 2 no. 6 ZAG which can only be provided without a permit within the framework of the threshold values of § 2 Para. 1 No. 11 ZAG .
The area exemption is intended to ensure that payment services provided without a license do not expand into general payment brokerage services. The directive and the ZAG 2018 therefore do not assume that compliance with the threshold values should be considered on a case-by-case basis, but rather allow a general, comprehensive approach. The legal requirements can be adequately taken into account by a statistical approach based on validly determined historical billing data, whereby – also to ensure the applicability of the regulation in practice – the determination of the cumulative threshold value of 300 euros is based on the subscriber number and the respective service can.
For this purpose, the average monthly offline billing turnover for each calendar year and the percentage of A numbers that exceed the statutory upper limit is calculated for the fixed network for all subscriber numbers ( so -called A numbers) that have used offline billed services from other providers (threshold value) of 300.00 euros ( incl. VAT) per month, averaged over the months of a calendar year. This is done – based on the average revenue per A number per calendar year – in such a way that first for each month (starting with the billing for January 2018) the average monthly offline billing-Turnover of all subscriber numbers that have used services from other providers billed offline from the fixed network is determined. Then all monthly averages of the past calendar year are added and divided by 12.
To calculate the percentage of A-numbers per year that exceed the threshold, monthly (starting January 2018) the number of all A-numbers that exceed the threshold is divided by the total number of all A-numbers via which offline approved services were used. The representation is in percent. Then all the monthly percentages are added together and divided by 12.
With mobile communications, all subscriber numbers ( so-calledMSISDN) the average monthly scope of the receivables from other providers purchased and settled by way of the factoring model for each calendar year and the percentage of MSISDN that exceed the legal upper limit (threshold value) of EUR 300.00 ( incl.VAT) per month, averaged over the months of a calendar year. This is done – based on the average revenue per MSISDN per calendar year – in such a way that initially for each month (starting with January 2018) the average revenue of all subscriber numbers, the mobile phone purchased and billed claims from services from other providers used have, is determined. Then all monthly averages of the past calendar year are added and divided by 12.
To calculate the percentage of all MSISDNs per calendar year that exceed the threshold, the number of all MSISDNs that exceed the threshold is divided monthly (starting January 2018) by the total number of all MSISDNs for which claims from other providers’ services are purchased and billed were shared. The representation is in percent. All monthly percentages are then added together and divided by 12.
The legal requirements for the exclusion of a general payment brokerage service are then sufficiently taken into account if – for offline billing and the factoring model – on the basis of this statistical procedure, compliance with the upper limit of 300 euros ( incl.VAT) based on the subscriber numbers included in the calculation for the respective calendar years with a confidence level of at least 99% .
The area exemption can also be claimed by so -called aggregators who provide electronic communication services if they comply with the upper limits described above.
- l) Payment transactions between payment service providers ( 2 Para. 1 No. 12 ZAG )
Payment transactions that are executed by payment service providers among themselves on their own account or by their agents or branches among themselves on their own account are not payment services.
The RegLimit. ZAG 2017 explains:
“This provision corresponds to the previous § 1 paragraph 10 number 12. It implements Article 3 letter m of the Second Payment Services Directive”.
Already the RegBegr. ZAG 2009 explained:
“[…] The provision implements Article 3(m) of the Payment Services Directive. It defines the factual framework for ongoing supervision; it is not relevant to the connection to the permit requirement under this law.”
The provision largely corresponds to Section 2 ( 1) No. 7 ZAG . The ZAG only covers the payment services that are provided for a customer who is not subject to supervision as a payment institution or falls under the privileged payment service providers who are exempt from the license or registration requirement and ongoing supervision under the ZAG .
- m) Group/internal payment transactions (2 Para. 1 No. 13 ZAG )
Payment transactions within a group or between members of a credit association group are not payment services.
The official justification states:
“The provision corresponds to the previous § 1 paragraph 10 number 13. It implements Article 3 letter n of the Second Payment Services Directive”.
Already the RegBegr. ZAG 2009 explained on the subject:
“[…] These transactions do not justify any authorization requirement under the KWG . The regulation implements Article 3(n) of the Payment Services Directive. With regard to the concept of a group, the guideline is linked to the commercial group i. s.d. Section 271 ( 2) in conjunction with Section 290 et seq. HGB .”
Section 2 ( 1) No. 13 ZAG creates an exception for “payment transactions within a group”. The commercial group concept i. s.d. Section 271 ( 2) HGB in conjunction with Section 290 et seq. HGB. The area exemption is therefore not applicable to horizontal groups.
According to its wording, the ZAG area exception “group privilege” is to be interpreted narrowly in the sense that it only covers payment transactions in which both the payer and the payee belong to the same group of companies. Payment transactions “into the group” or “out of the group” are not supported in the wording of the regulation and are therefore not covered by the area exception.
Payment transactions “between members of a banking association” are equated with internal group transactions.
- n) Cash withdrawal services (2 Para. 1 No. 14 ZAG )
No Payment Services are Cash Withdrawal Services provided that such Service Provider does not provide any other Payment Services.
The provision claims material identity with its predecessor from the ZAG 2009. The RegBegr. ZAG 2017 clarifies:
“The provision corresponds to the previous § 1 paragraph 10 number 14. It implements Article 3 letter o of the Second Payment Services Directive. It redrafts the wording of the area exception. This does not entail a change in the existing legal situation”.
More detailed explanations on the factual scope of the provision can be found in RegBegr. ZAG 2009:
“The regulation creates an area exception for the provision of ATMs. Number 14 excludes so-called independent ATM operators who, apart from setting up and loading ATMs, do not provide any other payment services and who have not concluded a (payment service) framework agreement with the respective payee. These are not to be confused with ATM operators, who have not concluded a framework agreement with the payee in connection with the provision of payment services, but agreements have been made with their payment service providers on the possibility of third-party use of ATMs, which are operated by third-party banks, for example. Anyone who sets up ATMs on their own accountParagraph 1 sentence 2 no. 2 KWG , which is subject to authorization under Section 32 Paragraph 1 KWG .”
Pursuant to Section 1 Paragraph 32 ZAG , a cash withdrawal service is the issue of cash via ATMs for one or more card issuers without a separate framework agreement with the to have closed customers withdrawing money.
This area exemption only privileges purely manual service activities and covers the cases in which a service provider sets up ATMs for an approved credit or payment institution, maintains them and stocks them with cash without providing any additional payment services.
The independent operation of ATMs satisfies the facts of the payment transaction 1 Para. 1 Sentence 2 No. 2 ZAG and does not fall under the area exemption.
Under certain conditions, the independent operation of ATMs can also include lending business within the meaning of Section 1 ( 1) sentence 2 no. 2 1st alternative KWGbe. That would be the case if the operator – as in the electronic direct debit procedure – assumed the risk of insufficient funds in the user’s bank account when issuing the money. In such a case, the ATM operator did not act like a paying agent of the bank that issued the debit card, but granted a loan itself. Such a loan would also not be covered by Section 3 ( 4) ZAG ; According to its wording, this provision requires a payment transaction (section 3 ( 4) sentence 1 no. 1 ZAG ).
- o) Receipt and transfer of cash as part of a charitable activity (§ 2 Para. 1 No. 15 ZAG )
The non-commercial acceptance and transfer of cash as part of a charitable activity or a non-profit-making activity are not considered payment services. The regulation was taken verbatim from the ZAG 2009. The RegBegr confirms the material identity with the previous provision. ZAG 2017:
“The provision corresponds to the previous § 1 paragraph 10 number 15. It implements Article 3 letter d of the Second Payment Services Directive”.
In fact, the execution in the RegBegr is still valid. ZAG 2009:
“The provision implements Article 3(d) of the Payment Services Directive. It creates a narrowly defined area exception exclusively for the physical receipt and transfer of cash in the context of a charitable or non-profit activity. The collection of donations in the public space on the basis of the relevant
laws of the federal states is the most important area of application of this area exception . A company that carries out this activity commercially for charitable institutions cannot claim the area exemption.
- E -money business (section 1 ( 2) sentence 2 ZAG ), definition of e -money (section 1 ( 2) sentence 3 ZAG ) and issuance of e -money as well as the area exceptions (section 1 ( 2) sentence 4 ZAG )
The e -money term is a legal term created on the basis of EU legal requirements, which typologically only depicts certain parts of the economic phenomenon of electronic money .
It has its predecessors in the money card business (section 1 ( 1) sentence 2 no. 11 KWG old version ) and the network money business (section 1 ( 1) sentence 2 no. 12 KWG old version ) with the entry into force of the 6th amendment to the KWG on January 1 , 1998
were added to the catalog of banking transactions . The legislature of the 6th amendment to the KWG regulated electronic wallets and money cards with the money card business . In contrast, with the network money business , prepaid electronic “payment
units”, some of which are referred to as electronic notes or coins , should be regulated under the KWG . At that time, there was only a possibility of exemption in individual cases for the cash card business (in accordance with Section 2 ( 5 ) KWG old version ).
With the entry into force of the Fourth Financial Market Promotion Act on July 1, 2002, The money card business (section 1 ( 1) sentence 2 no. 11 KWG old version ) and the network money business (section 1 paragraph 1 sentence 2 no. 12 KWG old version ) were classified under the term e -money business (section 1 paragraph 1 sentence 2 No. 11 KWG old version ) and standardized as the issue and management of electronic money ( No. 12 of Section 1 ( 1) sentence 2 KWG old version was repealed). “Electronic money” was defined in Section 1, paragraph 14KWG old version and e -money institutes were defined in section 1 ( 3d) sentence 4 of the version of the KWG legally defined. This served to implement the minimum harmonizing First Electronic Money Directive 2000/64/ EC ; in this respect, the previously mentioned facts of the cash card and network money business according to the 6th amendment to the KWG were anticipatory With the combination of the two alternatives under the
e -money business, the possibility of individual exemption in accordance with Section 2 ( 5 ) KWG old version extended to transactions that were previously subsumed under the network money business.
With the law implementing the Second E -Money Directive on April 30 , 2011 1 sentence 2 No. 11 KWG old version was removed from the catalog of banking transactions within the meaning of Section 1 paragraph 1 sentence 2 KWG and included in Section 1a paragraph 2 ZAG 2009 modified transferred. This happened in implementation of the fully harmonizing Second Electronic Money Directive 2009/110/EG. Since then, the e -money business has been the issue of e -money in accordance with Section 1a ( 2) ZAG ; The starting point and 1st factual requirement is the monetary value , which is further qualified by the other factual requirements for the purposes of the ZAG . Contrary to the legal situation applicable to date, the administration of e -money was no longer an additional element of the offence.
The regulation of e -money business under the Second E -Money Directive 2009/110/EC serves in particular to protect citizens who purchase electronic money in exchange for legal means of payment and entrepreneurs who use it as a means of payment instead of assuming, before the issuer becomes insolvent and to prevent the public acceptance of electronic money from being damaged beyond the individual case. With the fully harmonizing framework of the Second
E -Money Directive – which basically provides for the same competitive conditions through uniform requirements for ongoing supervision and for the criteria for market access – the solvency’s regulatory aspects in the foreground.
All in all , “e-money” is conceptualized throughout the individual stages of regulation as an electronic substitute for cash (coins and banknotes), which is generally not used for savings purposes and rather only comprises small amounts ( cf. recital 13 of the second e -money Directive and BT – Drucks . 17/3023, p. 42).
- a) E -money business (Section 1 ( 2) sentence 2 ZAG )
E -money business is the issuance of e -money. This is put in front of the brackets for every standard of the ZAG that is linked to the e -money business, as determined in Section 1 ( 2) sentence 2 ZAG .
The RegLimit. ZAG 2018 explains the regulatory system and history :
“The provision takes over the previous § 1a and systematically integrates this legal complex into the new law. In terms of regulations, paragraph 2 corresponds to the structure of paragraph 1 for payment services and payment service providers. The previous legal situation remains unchanged.
Sentence 1 number 1 adopts the legal definition of the previous § 1a paragraph 2. The material definition of institute also applies here – as with payment institutions”.
The facts of the e -money business are then broken down into two elements: e -money as the object of operation and the issue as the activity of operation.
- aa) Definition of e -money (Section 1 ( 2) sentence 3 ZAG )
The “e-money” defines the basic facts of 1 Para. 2 Sentence 3 ZAG in accordance with the restriction of 1 Para. 2 Sentence 4 ZAG (area exceptions). According to § 1 para. 2 sentence 3 ZAG ,
e -money is any electronically, including magnetically, stored monetary value in the form of a claim on the issuer, which is issued against payment of a sum of money in order to use it to carry out payment transactions 675f Para. 4 Sentence 1 BGB , and which is also accepted by natural or legal persons other than the issuer.
Electronic money is first and foremost a monetary value. A monetary value is any kind of means of payment . In addition to legal tender, the concept of monetary value includes any type of medium of exchange that is generally accepted or only accepted in a specific socio-cultural environment or only by the parties to a multilateral framework agreement as payment for specific goods or services.
Phenomenologically, the concept of monetary value goes far beyond the e -money concept in the ZAG . However, it is only the first prerequisite for an E-Money within the meaning of the ZAG , which is legally further qualified for the purposes of the ZAG by the additional factual requirements set out in Section 1 ( 2) sentence 3 ZAG . The monetary value must represent a claim on the issuer; created (issued) for payment of a sum of money and represented by electronic storage; it must be intended for payment transactions to carry out § 675f paragraph 4 sentence 1 BGB ; and which must ultimately also be accepted by natural or legal persons other than the issuer for these purposes.
Claim on the issuer
The monetary value must embody a claim on the issuer .
This claim is regularly based on an agreement between the issuer and the customer, which justifies the customer’s claim against the issuer and also stipulates that the customer must transfer the claim to third parties, the service providers as acceptors, to carry out payment transactions within the meaning of § 675f para. 4 sentence 1 BGB .
However, it is also a monetary value in the form of a claim on the issuer if, according to the contractual agreements with the customer, the issuer is only dealing with the third party (service provider or customer).acceptors) to perform to which the customer transfers the monetary value for the purpose of carrying out payment transactions within the meaning of Section 675f ( 4) sentence 1 BGB . In this case, the monetary value merely represents the third party’s claim against the issuer after the third party has received the monetary value from the customer.
The ZAG is based on a broad understanding; other legal constructions that qualify as a claim on the issuer are conceivable.
Issuance against payment of a sum of money
Furthermore, the monetary value must be issued against payment of a sum of money . This includes legal means of payment or means of payment issued by private individuals, which in turn are classified as e -money i.ZAG are meant to qualify.
e -money ZAG is therefore always derived from legal tender or other e -money ZAG , which in turn is derived directly or indirectly from legal tender.
If the issuer issues monetary values as a gift, there is no E-Money as defined above. This can be the case, for example, with an electronic gift voucher system in retail, with which customer complaints are regulated in such a way that the issuing dealer gives a gift voucher card to the customer “free” and as a gesture of goodwill following the processing of a complaint.
If the customer only has to pay for the issuance of the monetary values after he has already received them and has been able to use them for payments, this is also not an issue against payment of a monetary amount; However, the issue of payment instruments within the meaning of Section 1 (1) sentence 2 no. 5 ZAG or the lending business within the meaning of Section 1 ( 1) sentence 2 no.2 KWG as a banking business that requires a permit. ” Value units
” intended as a means of payment, which are created in barter clubs, private barter rings or other payment systems against real economic services, goods deliveries or services or such as bitcoins (they also do not represent a claim on the issuer after they were salt like in the old days or in modern currency crises, cigarettes get legitimacy solely from their actual use and acceptance as a means of payment) are created in computer networks without consideration, legally separate from the facts of the case -money, even if they have the same economic function as e -money and, from the point of view of money creation, have the real potential of one day competing seriously with legal tender and undermining the effectiveness of the money supply control by the central banks. The German legislature already implemented this restriction in the sense of a strict factual connection to central bank money with the implementation of the First E -Money Directive [within the framework of the 4th Financial Market Promotion Act based on the minimum EU legal requirements; With the deletion of the offense of network money transactions (§ 1 Para. 1 Sentence 2 No. 12 KWG in the version of the 6th KWG Amendment; KWG Amendment 1997, entry into force on January 1st, 1998), the aspect of private money creation was suppressed. However, only the creation of value units such as
bitcoins and their use as a means of payment are permitted.If, in the meantime, these units of value become objects of trade or investment beyond their use as a means of payment, the transaction is classified as a banking transaction according to Section 1 ( 1) sentence 2 no. 4 or 10 KWG or a financial service according to Section 1 ( 1a ) depending on its structure Sentence 2 Nos. 1 – 4 or 11 KWG to qualify and is subject to permission according to § 32 para. 1 KWG . bitcoins and any other privately created means of payment that – even if only in a small niche – competes with the legal means of payment is classified as a unit of account within the meaning of Section 1 ( 11) sentence 1 no. 7 and thus as a financial instrument in accordance with Section 1 para. 11 KWG .
Electronically stored Electronically stored
means that the customer, even if it is only the owner of the monetary value, has a claim to a specific service from the issuer.
Subcategory of electronic is the magnetic storage of existence of monetary value.
The electronic data carrier can be any electronic storage medium, for example a magnetic stripe or chip card or a hard disk in a single computer or central serveror a memory card in a mobile phone. In addition, future-oriented technologies from the areas of near-field and tele-communications as well as biometric recognition can also be storage media in this sense.
It is irrelevant for the classification where the storage medium on which the monetary values are stored is located. This can be with the customer who holds the electronic storage medium in his hands. It is also possible that the monetary value is stored on the issuer’s computer or by an external service provider who arranges the storage for the issuer.
The form of storage is also irrelevant. For example, it is not necessary for each monetary value to be stored individually. It is sufficient for the storage medium to record how many monetary values a customer is entitled to on the bottom line.
It is also irrelevant whether the name of the customer is recorded. For example, it is sufficient if it is stored that the respective holder of a specific card is entitled to a specific number of monetary values.
Provision for payment transactions within the meaning of § 675f Para. 4 BGB
Payment transactions within the meaning of § 675f Para. 4 BGB are any provision, transmission or withdrawal of a sum of money, regardless of the underlying legal relationship between payer and payee.
In contrast to the characteristic of the execution of payment transactions (§ 1 Para. 1 Sentence 2 Nos. 2 and 3 ZAG ), the characteristic of the execution of payment transactions ( 1 Para. 2 Sentence 3 ZAG ) is based on a broad understanding: What is meant is thus basically any transfer of monetary values from the customer to the acceptor, regardless of the legal relationship established between them in the value date relationship on the basis of which the customer is obliged to pay the service provider.
other than the issuer The monetary value must be accepted by natural or legal persons other than the issuer, ie third parties who are legally different from the issuer must accept the monetary value as a means of payment. Depending on the structure chosen, this can be, for example , parent companies and their subsidiaries or franchise centers and their franchise companies. The same applies to “total emitters” and their participants among themselves, ie two or more different people jointly issue a monetary value and at the same time act as “acceptors”.
- bb) issue of e -money
Issuance means there is a central body that establishes the monetary value by making itself the contractually agreed opponent of the claim of the owner (entitled person, customer) of the monetary value; this central office may also be the operator of the e -money business.
The legal form of the central office is irrelevant; Operators can therefore be natural persons, partnerships or other groups of persons (such as a civil law partnership or a community of heirs), legal
persons or corporate structures without legal capacity.
From the operator concept fall the places that the E-Technically manage money (only) on behalf of the issuer or the dealers who acquire it on the secondary market in order to distribute it further. In the event of unauthorized operation of the
e -money business, however, they are included companies pursuant to Section 7 ( 1) sentence 4 ZAG .
Trading in monetary values ( e.g. with prepaid cards available at petrol stations) is to be classified as a financial service under the further requirements of Section 1 ( 1a) sentence 2 No. 4 KWG (proprietary trading) and is classified as such in accordance with Section 32 ( 1) KWGgenerally subject to permission. Electronic money, regardless of whether it is prepaid and consequently does not qualify as e -money within the meaning of the ZAG or does not qualify as e -money within the meaning of the ZAG because of the limited possible uses or lack of prepayment ( e.g. bitcoins ) , falls under the units of account and is qualify as a financial instrument within the meaning of section 1 ( 11 ) of the KWG . This also includes e -money , the issuance of which is subject to authorization under Section 11 ( 1) sentence 1 ZAG .ZAG and the Act on Tracing Profits from Serious Crimes (Money Laundering Act – GwG ) meanwhile create a conclusive regulation for e -money agents within the meaning of
Section 1 ( 10 ) ZAG , insofar as they are limited to the activity described there. Provided that the issuance of the e -money is covered by a corresponding license for the issuer in accordance with Section 11 ( 1) sentence 1 ZAG , the further distribution (placement) of the e -money via a possibly multi-level distribution chain by the ZAG and AMLAfinally settled. However, the ZAG has no blocking effect on trading (secondary market) in e -money, eg with the prepaid cards available at petrol stations ; these so -called independent e -money dealers are not addressed by the ZAG . This also applies to e -money agents, who are not limited to the actual sale and possible exchange of cards, but are also active on the secondary market.
- b) Area exceptions ( 1 Para. 2 Clause 4 ZAG )
Electronic money, which basically qualifies as e -money according to 1 para. 2 sentence 3 ZAG , should nevertheless not be classified as e -money ZAG apply if it is to be classified under one of the two area exceptions of § 1 Para. 2 Clause 4 ZAG . This applies to monetary values
1. on instruments 2 paragraph 1 no. 10 ZAG are stored or
- which are used for payment transactions according to § 2 paragraph 1 no. 11 ZAG .
The RegBegr explained this. ZAG 2009:
“The application of the directive should be restricted to all payment service providers who are permitted to issue e -money in accordance with Section 1 (1) . It should not apply to the monetary value that falls within the negative scope of § 1a paragraph 5 […]. A comparable area exception already exists for payment services under Article 1 Paragraph 10 Number 10 or 11, which removes the corresponding payment services associated with the use of such monetary values from the scope of this Act. Both area exceptions should be understood in the context of national implementation in paragraph 5.
No E-Money within the meaning of this Act is thus a monetary value stored on instruments used for the acquisition of goods or services only at the issuer’s premises or under a commercial agreement with the issuer either only for acquisition within a limited network of service providers or only to purchase a limited range of goods or services.[…]”.
The explanation that already the RegBegr. ZAG 2009 is basically still valid under the ZAG 2018. When delimiting the factual scope of the facts of the e -money business below the ZAGthe statements on the corresponding area exceptions for payment services under Section 3 j) can therefore still be used.
If the requirements for the exclusion of a payment system with general use set out under Section 3 j) are not met, the operator can no longer invoke the area exception of Section 2 ( 1) No. 10 ZAG 2018 and is classified as an e -money institution in accordance with § 11 paragraph 1 sentence 1 ZAG subject to approval. The discount systems
are a special case, for which bonus points that can be used as a means of payment are only incurred when purchasing goods or paying for a service. As long as such a system does not allow the purchase of value units outside of a specific payment transaction, Section 2 Paragraph 1 No. 10 Letter a ZAG is generally applicable. The limited network is formed here by the legally different traders who have joined together to form such a system in the interests of better marketing of their goods. The formation of such associations is therefore regularly unproblematic, even beyond the regional catchment area of a city.
However, the special treatment of the discount systems can only be objectively justified by the exclusion of any additional purchase option. If a discount system allows the additional purchase of value units outside of a specific payment process, even if it is only occasionally during such a payment process, the special treatment can no longer be justified. This discount system is then to be measured against the same criteria as any other network that wants to claim the area exemption of Section 2 Paragraph 1 No. 10 Letter a ZAG . The same applies to discount systems in which there are points of acceptance that are exclusively dedicated to redeeming, not issuing, the value units.
Payment transactions that are made using e -money and that only serve to provide the services specifically described in more detail in Section 2 ( 1 ) no ( e.g. digital content within the meaning of Section 1 ( 27 ) ZAG and language services). For example , the user of a mobile network acquires digitized products, such as ringtones, background images, music or obtains talk therapy services via telephone or SMS , together with telephone services on the basis of so-called prepaid credit (which the user can obtain from the mobile phone provider on the basis of a corresponding framework agreement). be billed to the mobile operator. The catchphrase here is: only digital is legal. In any case, the prepaid credit with which the beverage can or another physical object is paid for from the machine does not fall under the area exception of Section 1 ( 2) sentence 4 no. 2 ZAG .
- Activities permitted for institutes and prohibited transactions (3 ZAG )
The ZAG knows payment service providers Section 1 ( 1) sentence 1 ZAG and e -money issuers 1 paragraph 2 sentence 1 ZAG . In addition to the privileged payment service providers finally listed in Section 1 ( 1) sentence 1 nos. 2 – 5 ZAG , Section 1 ( 1) sentence 1 no. 1 ZAG defines the category of payment institution. E -money institutes are listed in Section 1 ( 2) sentence 1 number 1ZAG , legally defined in addition to the privileged e -money issuers mentioned in § 1 Para. 2 Nos. 2 – 4 ZAG . Section 1 ( 3) ZAG combines payment institutions and e -money institutions under the concept of institutions. Activities permitted for institutes and transactions prohibited are standardized in § 3 ZAG . § 3 para. 1 ZAG establishes the general ban on accepting repayable funds from the public; the corresponding reservation of permission exists anyway according to § 32 para. 1 i. V. m. § 1 para.
1 sentence 2 no. 1 KWG . Section 3 ( 2) ZAG stipulates special features for the e -money business. § 3 para. 3 ZAG regulates the acceptance of funds for payment purposes and the distinction from deposit business. Section 3 ( 4) ZAG limits the granting of credit within the scope of the permitted activities of an e -money institution. In this respect, the legal situation has not changed materially compared to the legal situation under the ZAG 2009. The Reg Limit. ZAG 2017 states:
“The provision corresponds to the previous legal situation and was taken over from the previous law without any changes in terms of content, but was editorially revised in a significant way”.
3 ZAG is tailored to institutes that offer classic payment services 1 para. 1 sentence 2 no. 1 – 6 ZAG or the e – money business 1 para. 2 sentence 2 ZAG operate: these service providers come into contact with the customers’ funds. At institutions that use the payment initiation and account information service newly recognized by lawi 1 Para. 1 Sentence 2 No. 7 and 8 ZAG , there is no contact with the customer’s funds by definition. For the payment initiation service provider, Section 49 ( 1) sentence 2 ZAG , according to which he may at no time hold the payer’s funds in connection with the provision of the payment initiation service, is further clarified in accordance with the guideline specification.
- a) Basic ban on accepting repayable funds from the public ( 3 Para. 1 ZAG )
Outside the limits of paragraphs 2 and 3 and its license pursuant to Section 10 Paragraph 1 Sentence 1 ZAG or Section 11 Paragraph 1 Sentence 1 ZAG
, an institution may not make deposits or other deposits on a commercial basis or to an extent that requires a commercially organized business operation accept refundable funds from the public.
There was already the RegBegr. ZAG 2009 provides the following assistance to those applying the law:
“[…] In this context, a payment institution is also not permitted to refinance by issuing bearer or order bonds if an institution grants a loan within the limits of Section 2 ( 3). The combination of the acceptance of deposits or other repayable funds from the public on the refinancing side with the granting of credit for own account on the assets side makes a company a credit institution under EC law within the meaning of Article 4 ( 1) of Directive 2006/48/EC and thus leads to the applicability of the EC Banking Directive. […]”
An area exception for the issuance of bearer or order bondsUnlike Section 1 ( 1) sentence 2 no. 1 KWG for determining the material scope of the facts of the deposit business – Section 3 ( 1) ZAG does not provide for this. Accordingly , the e -money institution is also not permitted to issue bearer or order bonds.
Only one payment institution should be permitted to issue bearer or order bonds as long as there are no loans, not even within the scope of Section 3 ( 4) ZAGforgives. Once it has granted such credits, it may no longer issue bearer or registered bonds until such credits have been fully repaid. If, on the other hand, an institution has already issued bearer or order bonds, it may not grant any loans within the scope of Section 3 ( 4) ZAG before it has fully repaid its liabilities evidenced by bearer or order bonds.
- b) Special features for the e -money business (Section 3 ( 2 ) ZAG )
According to Section 3 ( 2) ZAG , an e -money institution must immediately exchange funds that it has received for the purpose of issuing e -money for e -money. Funds that are accepted in exchange for e – money are not considered deposits or other
repayable funds from the public Section 1 ( 1) sentence 2 no. 1 KWG , provided that 1. the issuance of the E
-money occurs at the same time as or immediately after the receipt of the amount of money to be deposited in exchange for the issuance of the e -money and
- the e -money and the balance created by the issuance of the e -money must not bear interest and the holder too otherwise no benefits related to the length of the holding period are granted.
Section 3 ( 2) takes precedence over Section 3 ( 1) ZAG . The RegBegr. ZAG 2009 information:
“[…] Conceptually, the acceptance of legal means of payment falls under the acceptance of other repayable funds from the public within the meaning of Section 1 (1) sentence 2 number 1 of the Banking Act, even if units of value
are issued in exchange, which in turn can be used as means of payment. In principle, the situation is no different than when promissory notes are issued. The consequence would be classification as a deposit business and thus as a banking business, the operation of which is subject to a license under Section 32 (1) of the Banking Act. Paragraph 1a makes an exception to this. If used by e -money institutions to issue E-Money received from customers is not considered a deposit or other repayable funds due to the legal fiction in paragraph 1a, this has the consequence that the issuing of e -money is not solely reserved for credit institutions, as was previously the case. A further consequence is that e -money institutions do not have to belong to any deposit insurance, but instead have to meet the security requirements of Section 13a in conjunction with Section 13. The directive justifies this with the fact that e -money as an electronic substitute for coins and banknotes is generally not used for savings purposes and rather only includes smaller amounts (compare recital 13 of the second E-Money Policy). The prerequisite for this, however, is that the electronic money is issued at the same time as or immediately after the receipt of the amount of money to be paid in in exchange for the issuance of the electronic money. The e -money itself or the credit that is generated against the issuance of the electronic money must not bear interest and the length of the holding period must not be remunerated in any other way. Consequently, since e -money is not intended to have a deposit function, no interest or other benefits may be granted unless those benefits are unrelated to the period during which an e -money holder holds e – money (see recital 13 of the secondE -Money Directive).”
An e -money institution should not fall under the definition of deposit business due to its activities (issuance of e -money) and should become a credit institution; the legislator wants to create competition for licensed credit institutions in the area of e -money business on the basis of the simpler licensing and supervisory requirements of the ZAG . However, this only applies on condition that the funds paid in are paid directly to
e -money can be exchanged, and only for as long as the e -money and the credit balance created by issuing the e -money do not earn interest (no interest) . The granting of other advantages related to the length of the holding period (hidden interest) must also be avoided; the legislator wants to rule out any form of circumvention of the interest ban. If the ban on interest is disregarded , the offense of deposit business (section 1 ( 1) sentence 2 no. 1 of the KWG ) is reinstated, with all its consequences, including the criminalization of section 54KWG .
- c) accepting funds for payment purposes; Distinction from deposit business (§ 3 Para. 3 ZAG )
If an institution manages payment accounts for payment service users within the scope of the license pursuant to Section 10 ( 1) sentence 1 or Section 11 (1) sentence 1, the institution may only use these payment accounts to process payment transactions
. Credit balances on payment accounts held with the institute may not earn interest (see above ) . The amounts of money that an institution accepts from the payment service users for the execution of payment transactions are not considered deposits or other unconditionally repayable funds of the public Section 1 ( 1) sentence 2 no. 1 KWG or as e -money.
In addition, the RegBegr. ZAG 2009 clear:
“A payment institution must separate the funds that it accepts from its customers for payment purposes from its other assets in such a way that they do not fall into the insolvency estate in the event of its insolvency and its creditors do not have the opportunity outside of the insolvency to access the funds in the bankruptcy access ways of individual enforcement; this regulates 2 paragraph 2 sentence 1 ZAG – E . It shall only use these funds for payment transactions as instructed by the payment service user who deposited the funds. It may not accept other repayable funds from the outset; otherwise it is punishable according to 54 KWG .
The conditions mentioned ensure that the funds remain the economic property of the payment service user, who makes them available to the payment institution for the execution of payment transactions. There is a risk of misappropriation; however, the risk of the insolvency of the payment institution should not be borne by the payment service user with his payment account deposit.
The border to the deposit business Section 1 ( 1) sentence 2 no. 1 KWG is exceeded in any case if the payment institution pays interest to the payment service user on the funds deposited, even if only by way of a discount; the option of earning interest is also not open to e -money institutions.
On the other hand, the payment institution is free to have the funds that it accepts from its payment service user customers for the execution of payment transactions subject to interest from the licensed credit institution to which it gives them in collective custody and to pass on the interest advantage to its customers, as long as the condition to number 1 is preserved. The payment institution, meanwhile, is not allowed to lock up the funds for a specific time, even with the consent of the payment service user. Even if the payment service user declares, when depositing the funds, that they do not wish to use part of the funds for a certain period of time, they must retain the possibility to change their mind and access the funds at any time, by making them usable for a payment transaction to be carried out by the payment institution, transferring them to a reference account at a licensed credit institution or having them paid out in cash, whereby the payment institution is free to contractually exclude cash settlement. […]”
The institution has to observe various requirements in order not to cross the border to the deposit business i. s.d. Section 1 ( 1) sentence 2 no. 1 KWG , which is reserved for credit institutions with a license under Section 32 ( 1) KWG . If it does not comply with these requirements, it is the addressee of measures pursuant to Sections 7, 8 ZAG and, if applicable , Sections 44c and Section 37 KWG , and is liable to prosecution under Section 63 ZAG and, if applicable , Section 54 KWG . These are in particular
– the principle of free availabilityof funds for the customer (Section 3 ( 3) sentence 1 ZAG ),
– the requirement for strict earmarking (Section 3 ( 3) sentence 1 ZAG ),
– the requirement for account separation (Section 3 ( 3) sentence 1 ZAG ),
– the ban on interest (Section 3 ( 3) sentence 2 ZAG ).
If, on the other hand, the institute stays within the limits of Section 3 ( 3) sentence 1 ZAG , Section 3 ( 3) sentence 3 is closed – in terms of regulation by way of fiction (“apply”)ZAG the classification of the accepted funds as a deposit business i. s.d. Section 1 ( 1) sentence 2 no. 1 KWG or as e -money.
Principle of free availability of funds (Section 3 ( 3) sentence 1 ZAG )
Funds in payment accounts must be freely available to the customer; otherwise the accounts would not be pure payment accounts. In particular, the institution may not limit the funds that it accepts from its customers for the execution of payment transactions to a specific period of time, not even with the consent of the payment service user. Even if the payment service user declares, when depositing the funds, that they do not want to use part of the funds for a certain period of time, the institution must not hold them to this declaration later and they must retain the freedom to change their mind and to access the funds at any time to access them by making them usable for a payment transaction to be carried out by the institute,
Principle of strict earmarking (Section 3 ( 3) sentence 1 ZAG )
The institution must use the funds that it accepts from its customers in payment accounts exclusively for payment transactions as instructed by the payment service user who deposited the funds. The institution may not even accept repayable funds for other purposes and may not reallocate them accordingly.
Account separation requirement (Section 3 ( 3) sentence 1 ZAG )
The institution must separate the funds it accepts from its customers for payment purposes from its other assets (separation requirement) in such a way that they do not fall into the insolvency estate in the event of its insolvency and his creditors also do not have the opportunity to access the amounts of money by way of individual enforcement outside of the insolvency.
Ban on interest (3 Para. 3 Sentence 2 ZAG )
Finally, the differentiation from the deposit business completes the prohibition on interest under 3 Para. 3 Sentence 2 ZAG . The border to the deposit business Section 1 ( 1) sentence 2 no. 1 KWG is exceeded in any case if the institution pays interest to the payment service user on the funds deposited, even if only by way of a discount. The institution that promises customers interest ultimately runs the deposit business covertly, even if the customer is free to dispose of the funds.
However, the institution is free to have the funds that it accepts from its payment service user customers for the execution of payment transactions subject to interest from the licensed credit institution to which it gives them in collective custody and to pass on the interest advantage to its customers. However, the institution may not derive any advantage of its own, for example in the form of an open or hidden share of the interest; In economic terms, it may only function as a transit point.
- d) Lending business (Section 3 ( 4 ) ZAG )
Within the scope of its license pursuant to Section 10 ( 1) sentence 1 or Section 11 (1) sentence 1, an institution may allow payment service users in connection with payment services 1 para. 1 sentence 2 no. 4 or 5 loans 19 of the German Banking Act, provided that
- the loan is granted as a secondary activity and exclusively in connection with the execution of a payment transaction,
- a term of more than twelve months is not agreed in the loan agreement and the loan is to be repaid in full within twelve months and
- the credit is not granted from funds received or held for the purpose of executing a Payment Transaction. Granting
a loan that meets these requirements is not considered a lending transaction Section 1 ( 1) sentence 2 no. 2 KWG if it is carried out by an institution that, as a payment institution, does not have a license to operate the lending business. An institution can thus also without a license for the lending business (section 1 ( 1) sentence 2 no. 2 KWG ) within the limits of section 3 ( 1)
4 sentence 1 ZAG also grant loans that are outside of this context as lending business Section 1 ( 1) sentence 2 no. 2 KWG would be assessed. If it fully complies with the three conditions of the provision, this activity does not count as a lending transaction due to the fiction of Section 3 ( 4) sentence 2 ZAG . The possibility of granting loans within the limits of § 3 para. 4 ZAG does not exist for institutes that issue bearer or order bonds
spend. The combination of refinancing through repayable funds from the public and the granting of credit for one’s own account turns a company into a bank i. s.d. Article 4 ( 1) of Regulation ( EU ) No. 575/2013 and thus leads to the applicability of the EU banking directives. An institution that has issued bearer or order bonds may only grant loans again within the scope of Section 3 ( 4) ZAG if it has also fully redeemed the last bond. An institution that has granted a loan may only issue bearer or order bonds again if it has also fully repaid the last loan.
Section 3 ( 4) sentence 1 no. 1 ZAG limits the granting of the loan to payment services i. s.d. § 1 paragraph 1 sentence 2 no. 4 or 5 ZAG . In any case, the credit is clearly subordinate to the payment function , provided that the cover is procured immediately . The credit accrues as an ancillary transaction as part of the execution of a payment service (and not just occasionally) that is an offense i. s.d. § 1 paragraph 1 sentence 2 no. 4 or 5 ZAGis to be assigned (technical credit).
Pursuant to section 3 ( 4) sentence 1 no. 2 ZAG , the loan agreement must state that the amounts presented as credit must be repaid in full within twelve months.
In the event of payment difficulties on the part of the customer in particular, the institute remains free to tolerate overdrafts in the long term as long as this is not abusive. Contractually, however, it may not subsequently postpone the due date of the loan beyond the 12 months. An amicable deferral is also excluded. A systematic exhaustion of the time limit according to § 3
Paragraph 4 sentence 1 no. 2 ZAG does not tolerate the strict earmarking of the granting of the loan, as it would otherwise devalue it; In such a case, the payment service aspect takes a back seat to the lending business and the facts of Section 1 ( 1) sentence 2 no. 2 KWG are revived.
- 3 para. 4 sentence 1 no. 3 ZAGreinforces the separation requirement laid down under § 3 para. 3 sentence 1 ZAG and the requirement of strict earmarking of the funds paid inby making it clear that these funds may not be used for loans to other customers may be refinanced. A formal separation of the funds is of little use to the payment service users if the funds deposited are protected against the bankruptcy of the institution, but could already be used up for a credit transaction in the event of the bankruptcy of the institution. Section 3 ( 4) sentence 1 no. 3 ZAGprotects not only the other payment service users of the same institution, but also the funds that the same payment service user has already made available to the institution for the execution of other payment transactions.
- Authorization requirement for payment institutions (section 10 ( 1) sentence 1 ZAG ) and for e -money institutions (section 11 ( 1) sentence 1 ZAG ) and registration requirement for account information services only (section 34 ( 1) sentence 1 ZAG )
- a) Authorization requirement for payment institutes (Section 10 ( 1) sentence 1 ZAG )
According to Section 10 ( 1) sentence 1 ZAG , anyone who wants to provide payment services in Germany as a payment institution requires written permission from the Federal Financial Supervisory Authority. The privileged payment service providers finally listed in Section 1 ( 1 ) sentence 1 nos . payment institutions 1 paragraph 1 sentence no. 1 ZAG
are companies that provide payment services on a commercial basis or to an extent that requires a commercially organized business operation without falling under those named in § 1 Para. 1 Sentence 1 Nos. 2 – 5 ZAG . The fulfillment of an alternative is sufficient to justify the authorization requirement of the transaction. The legal form of the company is irrelevant . Payment institutions can therefore be natural persons, partnerships or other groups of persons, legal persons or corporate structures without legal capacity.
Payment services are operated commercially, even if the scope of these transactions does not objectively require a commercially organized business operation, if the operation is designed for a certain period of time and the operator pursues it with the intention of making a profit.
Even if the business is not operated commercially, it is subject to authorization if the scope of the business requires a commercially organized business operation according to the rules of commercial reason. It is irrelevant here whether a business operation set up in a commercial manner is actually conducted. The only decisive factor is whether the establishment of such an operation is necessary for the operation of the business according to the payment services industry standardis objectively required. This is to be determined on a case-by-case basis and can also occur on a comparatively small scale when several payment services are operated at the same time.
As with any other authorization requirement, which is regulated in a financial market supervision law, the question of the authorization requirement / the authorization requirement of a specific transaction should be separated from the question of the possible operator ‘s ability to authorize it . In accordance with Section 43 ZAG , the Federal Financial Supervisory Authority maintains a register of payment institutions on its website that is to be updated on an ongoing basis .
- b) Authorization requirement for e -money institutions (section 11 ( 1) sentence 1 ZAG )
Pursuant to section 11 ( 1) sentence 1 ZAG , anyone who wants to conduct e-money business in Germany as an e -money institution requires written permission from BaFin. The privileged e -money issuers listed exhaustively in Section 1 ( 2 ) sentence 1 nos . E -money institutes 1 para. 2 sentence 1 no. 1 ZAG are companies that use the E
– Operate money business without falling under those named in Section 1 Paragraph 2 Sentence 1 Nos. 2 – 4 ZAG .
The qualification of a company as an e -money institution in accordance with section 1 ( 2) sentence 1 no. 1 ZAG and the associated license requirement in accordance with section 11 ( 1) sentence 1 ZAG is based solely on the fact that a company in the e -money business operates ( ie issues e -money) without falling under the privileged e -money issuers of Section 1 ( 2) sentence 1 nos. 2 to 4 ZAGto fall. In contrast to the classification of companies that provide payment services as payment institutions, the question arises as to whether the business is also operated commercially or to an extent that objectively (according to the rules of commercial reason) requires a commercially organized business operation , does not apply when classifying a company as an e -money institution.
In accordance with Section 44 ZAG , the Federal Financial Supervisory Authority maintains a separate electronic money institute register on its website that is constantly updated .
- c) Registration obligation for only account information services (Section 34 ( 1) sentence 1 ZAG )
Pursuant to Section 34 ( 1) sentence 1 ZAG , anyone who wants to provide payment services exclusively as account information services domestically on a commercial basis or to an extent that requires a commercially organized business operation only needs to be registered in writing by the Federal Financial Supervisory Authority.
- Notification obligation for payment systems according to Section 2 ( 1) no. 10 letters a or b ZAG and 11 ZAG (Section 2 ( 2) and (3 ) ZAG ), publication in the
register and information of the European Banking Authority (Section 2 ( 4 ) ZAG )
According to the will of the European legislator, the area exceptions for operators of limited network payment systems and telecommunications companies should be linked to the obligation for potential payment service providers to report the activities covered by the exception.
- a) If a company carries out an activity according to § 2 Para. 1 No. 10 Letter a or Letter b ZAG and the total value of the payment transactions of the previous twelve months exceeds the amount of 1 million euros (threshold value), it has this activity of to the Federal Agency and to state in a description of the service offered which exception pursuant to Section 2 ( 1) no. 10 letter a or b ZAG is being used. On the basis of this notification, the Federal Agency decides whether the requirements of Section 2 Para. 1 No. 10 Lettera or b are present. If the activity of the company does not meet the requirements of Section 2 ( 1) No. 10 Letter a or b, the Federal Institute will inform it of this (Section 2 ( 2 ) ZAG ).
The total value of the payment transactions includes all claims of the user or points of acceptance against the service provider, ie all claims that have expired and those that can still be used or have already been used but the payment transaction has not yet been finally booked.
The notification according to § 2 Abs. 2 ZAGis only required once the threshold has been exceeded. Since the law does not regulate any further reporting obligations for the subsequent period, there is no obligation to make further reports.
If a company carries out an activity pursuant to Section 2 ( 1) No. 11 ZAG , it must report this activity to BaFin and inform it in an annual audit report that the activity does not exceed the upper limits specified in Section 2 ( 1) No. 11 ZAG (§ 2 Para. 3 ZAG ).
According to § 2 paragraph 4 ZAGBaFin informs the European Banking Supervisory Authority about the notifications pursuant to Section 2 ( 2) and (3) ZAG , stating the exception used in each case. It has the information that is displayed to it in accordance with Section 2 ( 2) and (3) ZAG in the register of payment institutions or, insofar as the exception to the definition of e -money in accordance with Section 1 ( 2) sentence 4 ZAG applies, in e -money – to make institute registers publicly accessible; the European Banking Authority will inform them separately.
- b) The companies that have the obligation to report and hand it over responsibly can use auxiliary persons for this purpose. Since the reporting company is not under the supervision of the Federal Agency, it has to check its identity before entering it in the database. For reasons of simplification, the associations listed in the appendix have declared their willingness to make the notifications for non-members for the first time in 2018 for the notifications according to § 2 Para. 2 ZAG . The transmitted data will only be used by you for the notification procedure and will be communicated to the Federal Agency via DE- Mail, which will integrate a reliable proof of identity.
Since the associations listed in the appendix report the reports to the Federal Agency in accordance with Section 2 ( 2) ZAG by May 31, 2018, the companies that are subject to the reporting obligation and want to use this service must provide them with the required information by April 30, 2018. Companies that are required to report and do not want to use
this service must send the notification by DE- Mail to the Federal Agency’s email address Anzeige-Par2-ZAG@bafin.de-mail.de by May 31, 2018. This e-mail address is also to be used by companies that only start their business operations after April 30, 2018.
For the notification according to § 2 Abs. 2 ZAGIt is essential to use the Excel file attached to this information sheet, otherwise automated data processing would be made disproportionately difficult.
c) The associations listed in the appendix have declared their willingness to report annual notifications – for the first time in 2019 – for non-members as well for the annual notifications pursuant to § 2 Para. 3 ZAG , for which the procedure described above applies accordingly to do. The transmitted data will only be used by you for the purposes of the notification procedure and the Federal Agency by DE- Mailby May 31, 2019, in the following years by April 30 of the respective calendar year. Companies that are subject to notification and want to use this service must provide one of the aforementioned associations with the required information by April 30, 2019. Companies that are required to report and do not want to use
this service must send the notification by DE- Mail to the Federal Agency’s email address Anzeige-Par2-ZAG@bafin.de-mail.de by May 31, 2019 . In subsequent years, the annual report must be submitted by April 30, 2019; this also applies to companies that only start their business operations during the calendar year.
For the notifications according to § 2 Abs. 3 ZAGit is essential to use the Excel file attached to this leaflet. It also contains the required auditor’s report.
- d) The Federal Agency examines the notifications pursuant to Section 2 ( 2) and (3) ZAG to determine whether there is an exemption from a permit. This is regularly assumed based on the confirmation of the reporting company, so that if the notification is complete, its receipt and compliance with the area exemption are automatically confirmed. If a notification is made via the participating associations, they will forward the confirmation to the companies that are subject to the notification obligation. The Federal Institute will continue to check, if necessary, and also randomly, whether the use of the notified area exception is justified.
- Notices and Addresses
This leaflet contains basic information about the ZAG . It does not claim to be an exhaustive presentation of all questions relating to the ZAG and in particular does not replace the individual case-related permit or registration request to the Federal Institute. As the national supervisory authority, BaFin only speaks for its area of responsibility, ie for payment services and e -money transactions in Germany, into Germany or out of Germany. In particular, the assessments of the factual scope of the area exceptions according to § 2 paragraph 1 sentence 1 no. 10 and 11ZAG not eligible for a passport; the cross-border use of payment instruments may also have to be coordinated with the responsible authorities abroad. Complete documentation of the contractual agreements on which the planned business activity is based is required.
How to get bitcoins into your accounts?
Accounting for bitcoins as a currency means valuing them at their market value at each year-end, which can be very complicated.
For a company, it is strongly recommended to invoice in euros indicating the amount excluding tax, VAT and the amount including tax and to indicate the counter-value in bitcoins which serves as payment.
From then on you can integrate bitcoins in stock acquisition (and not on a cash account).
What accounting qualifications?
The question of the accounting qualification of bitcoin and cybercurrencies in general has not yet been decided in France.
A company engaged in the activity of buying/reselling or “mining” bitcoins could consider bitcoins as inventory according to the definition of the General Accounting Plan (accounting standardization regulations in France) since it is indeed an “asset held for sale in the ordinary course of business […], or intended for consumption in the process of production or provision of services, in the form of raw materials or supplies”. – (Art 211–7).
We could also consider this as an intangible asset as defined by the PCG (Art 211-5) since it is indeed a “non-monetary asset” since it is not legal tender and “without substance physics” . It is indeed, as the Official Bulletin of Public Finances (of July 7, 2014) says “virtual units of account stored on an electronic medium” , the electronic medium not being the computer or the USB key or the mobile phone (all optional since you can remember a private key by heart without any other support), but the blockchain itself.
How to assess the value of this stock or this “intangible fixed asset”?
According to the General Accounting Plan, they must be recorded as assets on the balance sheet at their acquisition value, i.e. the price paid at the time of acquisition (one can imagine, in the case of mining, that this price corresponds to the cost of production). This price cannot be reassessed upwards depending on the evolution of the market. Conversely, it would be possible, according to French accounting standards, to take into account their fall in market value when the accounts are drawn up.
How is bitcoin traded?
What is bitcoin trading?
When trading Bitcoin, you speculate on price movements of the cryptocurrency. There are two ways to trade bitcoin: either buy the cryptocurrency directly through an exchange in hopes of selling it for a profit, or speculate on price movements without ever owning a single bitcoin yourself. Derivatives like CFDs allow you to speculate on cryptocurrency rates. They are increasingly favored by traders looking to make the most of Bitcoin’s volatility.
At IG you can open a position on Bitcoin with CFDs . This leveraged product allows you to speculate on both rising and falling prices without directly owning the underlying coin. So you don’t have to take any responsibility for the security of the bitcoin tokens.
Find out what influences the Bitcoin price
In order to seize trading opportunities or limit the impact of the recent bubble, you must first understand what factors influence Bitcoin price:
- Bitcoin offer. The current supply of bitcoins is capped at 21 million and is expected to be exhausted in 2140. Accordingly, Bitcoin price is expected to increase as demand grows in the coming years.
- bad press. Any news story that questions the safety, value, and longevity of bitcoin negatively impacts the overall bitcoin market price.
- Integration. How Bitcoin is perceived by the public also depends on its integration into new payment systems and the banking environment. A successful integration could increase demand, which in turn would have a positive effect on the Bitcoin price.
- key events. Regulatory changes, security breaches, and macroeconomic Bitcoin announcements can have serious price implications. If users join forces to increase the speed of the network, trust in Bitcoin often increases – and with it the price.
Create a bitcoin trading plan: choose a trading style and strategy
- day trading
- trend trading
- Bitcoin hedging
- HODL (buy and hold)
How does Bitcoin day trading work?
Day trading with Bitcoins entails that you open and close a position within a single trading day. So you don’t take bitcoin market risk at night. At the same time, there are no overnight financing costs for your position. If you want to make profits from short-term bitcoin price movements, this strategy might be for you. It allows you to make the best use of the daily Bitcoin volatility.
How does Bitcoin trend trading work?
Trend trading means that you open a position that corresponds to the current trend. For example, if there is a bearish trend in the market, go long, but if there is a bullish trend, go short. If the trend slows down or even reverses, you should consider closing your position and opening a new one in line with the current trend.
Bitcoin Hedging Strategies
With bitcoin hedging, you reduce your risk by hedging an existing position with a second, opposite position. This way you protect yourself from unfavorable market movements. For example, if you hold bitcoin but fear the cryptocurrency will lose value in the short-term, you would open a short position. Then, should the market price of bitcoin actually drop, gains from the second position would offset losses from the first.
HODL Bitcoin Strategy – Buy and Hold
The HODL strategy is essentially about buying and holding bitcoins. The name derives from the misspelling of the English phrase “hold” from a post on a cryptocurrency forum. In the meantime, there is even talk of “hold on for dear life”. However, don’t take this sentence too seriously – only buy and hold Bitcoins if you foresee a positive, long-term development for the price. If your analysis or trading plan indicates that you should sell your positions to take profits or limit losses, you should do so. You could also place a stop-loss order to automatically close your positions.
Decide how you want to trade Bitcoins
There are several ways to trade Bitcoins:
- Bitcoin trading with derivatives
- Bitcoin trading through an exchange
- Bitcoin ETFs
|Bitcoin derivatives trading at IG||Bitcoin trading through an exchange|
|Cost of exposure to 1 bitcoin||Retail investor margin is 50% of a coin’s total value.||Full cost of the coin|
|Short Selling||Yes||No – only with consenting counterparty|
|At sight||We are regulated by BaFin and the Deutsche Bundesbank.||No central supervisory authority|
|execution||0.0014 seconds execution speed and unique liquidity||Liquidity dependent on stock exchange offering|
|Deposit and withdrawal restrictions||None. Depositing and withdrawing is free and fast.||Fees may apply and deposit or withdrawal restrictions may apply.|
|overnight financing costs||Fall to||Don’t fall|
Bitcoin trading with derivatives
With us you can trade Bitcoin with CFDs. This means that you are speculating on the Bitcoin rate instead of owning the cryptocurrency directly. This allows you to go long when prices are rising and short when prices are falling . Here are some key features of Bitcoin trading with us:
- Leverage and Margin: CFDs are always traded with leverage. This means that you only have to put down a comparatively small deposit – the so-called margin – in order to get full exposure.
- High liquidity: Thanks to our large customer base, our bitcoin market is very liquid. This means you are more likely to be able to fill your orders at the price you want – even if you’re trading large volumes.
- Hedging: Shorting derivatives can be an effective way to hedge your portfolio and protect yourself if the market moves against you.
|CFD trading||All customers|
|traded in||contracts worth one bitcoin|
|platforms||Web-based trading platform, mobile trading app and MT4|
Bitcoin trading through an exchange
Trading bitcoin on an exchange is best for traders who follow a buy-and-hold strategy. Buying bitcoins on an exchange allows you to take possession of the coins directly with the expectation that the price will rise.
However, trading bitcoin through an exchange can pose various problems:
- Some bitcoin exchanges are not adequately controlled by central regulatory authorities and their infrastructure is not or only insufficiently designed to respond to support requests quickly.
- Bitcoin exchanges’ matching mechanisms and servers are often unreliable, making suspended markets or reduced execution accuracy more likely.
- Bitcoin exchanges often charge fees and use restrictions on deposits and withdrawals from your exchange account, while often taking days to open the account.
In parallel with trading CFDs on Bitcoin or buying the cryptos directly on an exchange, you can also invest in Bitcoin Exchange Traded Funds (ETFs) that closely track or replicate the underlying Bitcoin market price. Just like CFDs, ETFs do not give you ownership of the underlying Bitcoins.
Go long or short
Trading financial derivatives allows you to be both long and short depending on current market sentiment . If you expect Bitcoin price to go up, go long. However, if you think the price will go down, open a short position.
Set your stops and limits
Stops and limits are crucial risk management tools – and you have several to choose from when you trade with us:
- Normal stops automatically close your position at a set level. However, you can experience slippage if the underlying market price changes rapidly.
- Trailing stops follow favorable market movements to lock in profits while limiting your risk of loss. However, there is no guarantee against slippage here either.
- Guaranteed stops always close your position at the exact price you set, eliminating the risk of slippage. Our guaranteed stops can be placed freely. However, there is a fee for triggering the guaranteed stop.
You can select all these tools through the trade ticket on our trading platform.
Place and monitor your trade
To open a position on Bitcoin, you “buy” if you think the price will go up, or “sell” if you think the price will go down. Once you place your trade, you need to monitor the market to make sure it’s moving in the direction you expect.
The technical indicators available on our trading platform can help you identify how the Bitcoin price might be moving. Also, indicators can help monitor current market conditions, such as volatility or market sentiment.
Close your position to make profits or limit losses
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Of course, you can benefit from bitcoin trading. Your odds of winning depend on the depth of your market analysis, market knowledge and market conditions. However, keep in mind that all trading involves risk.
How does bitcoin trading work?
Bitcoin trading allows you to speculate on the price movements of the cryptocurrency using financial derivatives such as CFDs.
You can go long if you expect prices to rise, or go short if you expect prices to fall. Your profits or losses depend on whether you are correct in your prediction.
Is bitcoin trading safe?
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When is the best time to trade Bitcoin?
Although cryptocurrency is a 24-hour, seven-day-a-week market, there are times when there are heightened levels of volatility and liquidity. For example, 1pm ET is not uncommon for increased volatility as this is when the UK and US markets are picking up steam.
a problem for monetary policy?
Cryptocurrencies like Bitcoin started with the aim of partially replacing financial intermediaries such as central banks and commercial banks with distributed ledger technology. This enables transactions on a peer-to-peer basis. The authors show how well the new currency competition fulfills the money functions and what comparative advantages it brings with it. In addition, the effects on the conception and implementation of “traditional” monetary policy are outlined.
An asset that fulfills the function of a medium of exchange is referred to as money. The manifestations of money have changed over time, from commodity money to coins and paper money to bank money with no material value. The most recent development is cryptocurrencies such as the system conceived by Satoshi Nakamoto and dubbed “Bitcoin”.Two properties in particular are characteristic of cryptocurrencies: Because they use blockchain technology, there is no need to involve a trustworthy third party for all types of financial transactions. In the case of financial transactions, these are usually the commercial banks, and in the case of cross-border money transfers, the central banks. In addition, the state monopoly on banknotes is eroding. So far, cryptocurrencies have only been issued by private individuals, there is no dependency on state institutions. This means that the real income from the issue of money (seigniorage) also accrues exclusively to the private sector.
Central banks are aware of the challenges, so they have put cryptocurrencies on their research agenda. The problem areas are manifold: Can the stability of the payment and clearing systems continue to be guaranteed? What factors determine the demand for cryptocurrencies and to what extent does this replace the demand for traditional central bank money? What repercussions on the mode of action and the design of monetary policy can be expected? Can central banks counteract the erosion of the banknote monopoly by issuing their own cryptocurrencies?
Are cryptocurrencies money?
Economists define money as anything that is commonly accepted to pay for goods and services and to pay off debt. This definition is usually made concrete with the help of the three money functions (medium of exchange, unit of account, store of value). In particular, the criterion of general acceptance has not (yet) been met for cryptocurrencies, so that the central banks, but also the relevant specialist literature, deny that they are money. However, everyone involved is aware that this verdict is a snapshot. Last but not least, the extremely dynamic technological development can very quickly make a reassessment necessary.
Similar to paper money or bank money, cryptocurrencies have no intrinsic value. A user will only accept them as a medium of exchange if he can be confident that at some future point in time a sufficiently large number of other actors will be willing to exchange them for goods and services. This dependency on trust is inherent in all currencies, in particular it applies to the same extent to legal tender. While the state can attempt to generate such trust by specifying legal tender, the status of legal tender is neither necessary nor sufficient for it to function as a medium of exchange. Both legal tender and cryptocurrencies are so-called foreign money, ie the assets measured in euros or in bitcoins are not matched by the same level of liability from another actor. In the case of the euro or the US dollar, a banknote is legally a claim against the central bank, and therefore a liability for the central bank. But since the liability does not include an obligation to exchange the note for goods or services, it is literally only on paper. In order to serve as a medium of exchange, both legal tender and cryptocurrencies must gain said trust, for example by creating value stability. But since the liability does not include an obligation to exchange the note for goods or services, it is literally only on paper. In order to serve as a medium of exchange, both legal tender and cryptocurrencies must gain said trust, for example by creating value stability. But since the liability does not include an obligation to exchange the note for goods or services, it is literally only on paper. In order to serve as a medium of exchange, both legal tender and cryptocurrencies must gain said trust, for example by creating value stability.
The number and volume of transactions processed in cryptocurrencies have so far been comparatively small. Currently (as of March 2017), around 300,000 transactions per day are carried out worldwide using the Bitcoin network, which means that half of the technical capacity of around seven transactions per second has been exhausted. In comparison, around 25 million transfers are made every working day in Germany alone, and established online payment methods such as Visa or Mastercard handle up to 2,000 transactions per second. In the case of cryptocurrencies, the technological restrictions are still severe, but one should not expect more from the first generation of a new technology than the basic functionality of the system, and this is undoubtedly given.
Cryptocurrencies are a network asset – this is much more important for establishing themselves as a medium of exchange than the current technological restrictions. Why should customers switch to cryptocurrencies when only a few stores accept them? And why should business owners accept them when few customers want to pay with them? Because the consumption of network goods is associated with positive external effects, the market provides an “insufficient” quantity. Even if everyone involved knows and accepts the fundamental superiority of the new payment technology, network effects plus switching costs can prevent the transition to the new technology. The decentralized organization of the system makes it difficult to reach the critical mass of users, nonetheless, overcoming this threshold is likely to be the acid test that will ultimately determine the success of cryptocurrencies. Hyperinflation of legal currencies or making a cryptocurrency legal tender would make it easier to exit inferior equilibrium, but such scenarios are unlikely.
Now, using a payment technology is usually not a 0-1 decision. The typical consumer uses two or three methods, such as cash for everyday purchases and credit cards for larger transactions. A new payment method such as cryptocurrency does not have to be superior to previous technologies for all transactions according to all criteria such as costs, speed or security. The superiority in individual sub-areas is sufficient to find substantial distribution. As empirical studies show, consumers react very sensitively when choosing a payment method if the new technology better suits their needs.
Somewhat paradoxical, at least with Bitcoin: its use as a medium of exchange is limited precisely because it is a successful store of value. As Figure 1 illustrates, Bitcoin’s appreciation against the US dollar has been exorbitant since at least 2013. The increases in value are anything but steady, but a buy-and-hold strategy seems lucrative. In addition to interest in a new technology, the function as an investment is the most important motive for holding bitcoins. At least for US consumers, this motive is more important than the demand for bitcoins to make purchases of goods and services. The use of newly mined bitcoins points in a similar direction, they are mostly not spent, but remain in the hands of the miner as an investment.
With reference to the extreme volatility of the Bitcoin price (see Figure 1), the property as a store of value is quite controversial. The daily fluctuations in the Bitcoin exchange rate to the US dollar are often several percent, so that an intertemporal transfer of wealth from today to tomorrow or the day after tomorrow is sometimes not stable in value. The high volatility reflects the low level of liquidity in the bitcoin market. In view of the around 16 million bitcoins currently in circulation, the trading volume is low and, as is to be expected in a “thin market”, even minor changes in supply and/or demand lead to substantial price fluctuations. Because the maximum number of Bitcoins in circulation is technologically fixed, the Bitcoin market will continue to be less liquid in the future, and the high price volatility will not decrease. For risk-averse consumers, this may be a good enough reason not to experiment with cryptocurrencies like bitcoin in the first place. In any case, this is an additional hurdle for general acceptance as a means of payment. The high price volatility generates two further effects:
- The mirror image of exchange rate risk is the uncertainty about the real value of a transaction. This applies to buyers as well as sellers of goods. The latter often react to this by using a service provider (software) that immediately converts the Bitcoins received into euros or US dollars and credits the seller with the equivalent value. In this case, consumers pay with bitcoin, but it is unclear whether it can really be said that the sellers accept bitcoin.
- The high price volatility prevents the use of bitcoin as a unit of account. The companies that accept Bitcoin also formulate their prices in euros or US dollars, the Bitcoin price is only calculated after conversion with the current exchange rate. The large number of zeros that result from the conversion is also a hindrance to the function as a unit of account, so at today’s exchange rate a 50-cent roll costs around 0.0005 Bitcoin. Due to the purely digital character of the cryptocurrency, however, this is a solvable problem, the scaling could easily be changed to a level that is easier for consumers to handle.
Relative Strengths of Cryptocurrencies
In order to establish themselves as a means of payment in the long term, cryptocurrencies must be classified as “better” than previous currencies or payment methods, at least with regard to individual properties. A first, primarily macroeconomic point of view is the already mentioned value stability. Much of monetary history to date has been a history of sinking, time and time again governments have rendered currencies worthless through inflation. The outsourcing of monetary policy to a non-governmental central bank is a relatively recent development that has put a stop to this. But central bank independence can be changed quickly by law, it is fragile. In addition, independent central banks can also pursue an unsound monetary policy.
Cryptocurrencies rigorously overcome these problems. At least so far, cryptocurrencies have been issued exclusively by private individuals, with no government or other central authority involved. The incentive for private inflation (a frequently used argument against private currency competition à la Hayek) is lost for two reasons. For one thing, there is no private individual issuing the cryptocurrencies, the newly created currency units fall to those who solve a cryptographic task first. This mining process is carried out according to transparent rules that can be viewed by everyone, and everyone can take part in it. On the other hand, the size of the money supply is not decided on a discretionary basis, Instead, the supply of money follows the rules of mathematics by solving the cryptographic tasks. With bitcoin, the supply is limited to around 21 million units, so inflation of bitcoin is definitely ruled out. Other cryptocurrencies such as the peercoin do not fix the supply in absolute terms, but also allow a positive growth rate in the long term. The fact that binding to mathematical rules does not make absolute sense from an economic point of view will be discussed further below.
At the microeconomic level, blockchain technology allows traditional financial intermediaries to be circumvented, and commercial banks in particular are threatened with an erosion of their business models. Similar to peer-to-peer lending, where lenders use platforms to transfer financial resources directly to borrowers, blockchain transfers can be made directly between payers and payees. The technology ensures that if Ms. A wants to transfer money to Mr. B, only Mr. B can be the actual recipient, that Ms. A can prove that she has the appropriate balance and that the amount actually comes from Ms. A. A trustworthy third person or institution such as the commercial bank, which has so far clarified these questions for Ms. A and Mr. B, is not necessary.
The processing or transfer fees charged by traditional financial intermediaries allow a rough estimate of the savings potential. The extreme point is cross-border transfers, where the average fee is 8.9% of the transfer amount. Credit card companies such as Visa and Mastercard charge a fee of 2% to 3% of the turnover, PayPal charges a fee of 1.9% of the sales value plus 0.35 euros per transaction. However, these savings must be offset against the fees that Bitcoin payment service providers such as BitPay or Coinbase charge when converting traditional currencies into Bitcoin and vice versa, currently around 1% of the conversion amount. Whether Bitcoin transactions will retain their current cost advantage in the long term is occasionally questioned, with reference to the likely increase in transaction fees. The currently dominant remuneration of the miners in the form of new bitcoins will have to be replaced by fees as a reflex of the increasingly complex mining process, the amount of which can only be speculated at the moment.
An undisputed plus point: Transactions processed via the blockchain or the Bitcoin system have a speed advantage. Traditional transfers take 1 business day within the EU, around 5 business days for transfers to the US and up to 20 business days for transfers to developing countries. This is anachronistic. With the bitcoin system, the respective information (sender, amount, recipient, etc.) must be recorded in a block, and it takes about ten minutes to generate a block. A transaction is usually considered confirmed after six blocks, so transactions within an hour can be considered secure. With Litecoin, the processing time is reduced to around 15 minutes. The reaction of the central banks to this technological development was a little long in coming,
If cryptocurrencies are to catch on, they must offer their users a level of security that is at least comparable to that of traditional currencies. In particular, this means that transactions must be forgery-proof. Essentially, the risks of a cryptocurrency system can be divided into two groups: risks that arise within the network and risks that arise at the interface, i.e. when using the network. The intrinsic risks include the security of the cryptography, the de-anonymization of users, the possibility of “double spending” and the security of the consensus algorithm.
In a direct comparison, the interface risks outweigh the risks. In the eight years of use of the Bitcoin blockchain, no substantial technical malfunctions have become known, and even if the security of cryptography is a fundamental problem, the encryption technology chosen by Nakamoto can (so far) be classified as secure.
The concept of pseudonymity, which is intended to make transactions invisible to third parties, is being intensively discussed. Cash offers “perfect” anonymity to outsiders, only those directly involved in the exchange are involved. The opposite is formed by conventional bank transfers, in which the inspection and tracing of transactions are unproblematic, at least for the respective bank, the transfer to state authorities such as the tax office, for example, can hardly be prevented. Cryptocurrencies take a middle ground here: all transactions are recorded on the blockchain and can be publicly viewed by all network participants. But the transactions are only available under pseudonyms. They are only identified by payment addresses generated by a private-public key pair.
The possibility of 51% attacks on the Bitcoin system is also often highlighted: it is the blockchain that has been accepted by the majority of computing power. If an attacker has this majority, he can retrospectively change blocks and thus his own transactions. In short, the attacker can decide which transaction is mapped to the blockchain. As a result, the network is subject to an inherent risk. However, the computer capacity required for this is now so extensive and therefore expensive that this risk can be classified as low. A reassessment may be required should there be even greater concentration in the mining pools.
The interface problem is significantly more critical for security. The majority of cryptocurrency transactions are carried out with the help of payment service providers who convert traditional currencies into cryptocurrencies and vice versa, who store the private key in an online wallet etc. The cryptocurrency user therefore uses a third party here, the he – similar to a commercial bank – has to trust. Intermediaries also appear in the cryptocurrency system. These are not only a potential target for attacks, but can also act with fraudulent intent. The consequence is the risk of a corresponding loss of assets. Traditional financial intermediaries face the same problem, the cryptocurrency system is a relative improvement in this regard, as it makes the use of intermediaries at least partially obsolete and does not require the permanent use of intermediaries. A similar risk of loss arises in transactions with small transaction volumes. Here, customers and retailers usually do not want to wait until the transaction is confirmed in the blockchain, so the retailer in particular bears a residual risk. In principle, this also applies to card payments, but here there are – unlike cryptocurrency systems – insurance solutions that limit the risk of non-payment. until the transaction is confirmed in the blockchain, the retailer in particular bears a residual risk. In principle, this also applies to card payments, but here there are – unlike cryptocurrency systems – insurance solutions that limit the risk of non-payment. until the transaction is confirmed in the blockchain, the retailer in particular bears a residual risk. In principle, this also applies to card payments, but here there are – unlike cryptocurrency systems – insurance solutions that limit the risk of non-payment.
A significant advantage of cryptocurrencies is the absence of counterfeit money. Based on the knowledge of the entire transaction history, each user can check whether a transaction is valid and accept it (possibly after a waiting time or when the transaction has been confirmed by a given number of blocks). In order to ensure the security of the transaction history, certain reference blocks are firmly recorded in the source code of the Bitcoin system and are thus finally fixed.
Since cryptocurrencies are ultimately software-controlled, risks and security gaps cannot be eliminated with absolute certainty. However, this applies to the same extent to traditional payment systems, so in summary it can be said that cryptocurrencies are not inferior to traditional money in terms of technical security, but may even be superior, provided users comply with the appropriate framework conditions.
Regional distribution of bitcoin
Cryptocurrencies know no state borders and no regional or geographic barriers that limit their use. Their digital character allows for extremely easy global use. Nevertheless, the extent of the regional use of cryptocurrencies is of great interest to national actors, because the regional distribution provides information on how intensively they are actually affected by the cryptocurrencies. The German commercial banks should be mentioned here, for example, for which the intensification of competition is vehement if cryptocurrency transactions are widespread in Germany. The same applies to national authorities such as the Federal Financial Supervisory Authority (BaFin), which may have to intervene under supervisory law, as it classified cryptocurrency transactions as financial instruments in the form of units of account. Or monetary policy: The European Central Bank (ECB) could practically ignore cryptocurrencies if Bitcoin & Co. were not used in the euro area, but almost exclusively in China or the USA.
In a regional classification, a distinction must be made between the creation and use of cryptocurrencies. The creation of the most important cryptocurrency, bitcoin, can be localized regionally using the data from the mining process. At least 99% of the blocks on the Bitcoin blockchain are created by mining pools. This shows a two-fold concentration: the five largest pools together generate about 80% of the blockchain blocks, and four of these five mining pools operate out of China (because of low energy prices). Accordingly, the Chinese renminbi is the most important currency in bitcoin trading (31%), followed by the US dollar (25%) and the euro (9%).
The assignment of users to specific countries is much more difficult compared to the creation of bitcoin, since the system is pseudonymous and therefore there is no central directory that could be used to study the regional structure. Therefore, other data sources must be used. A first source of information is the distribution of the currently 126 trading places worldwide. A clear regional focus cannot be identified, the Bitcoin exchanges are spread all over the world, 37 exchanges are in Asia, 35 in Europe, 19 in North America, 13 in South America, twelve in Australia/Oceania and three in Africa. The country with the most bitcoin exchanges is the UK with 19 exchanges, followed by China with 12 exchanges and the US with nine exchanges. With a stock exchange, Germany is more of a Bitcoin developing country.
If one considers the download frequency of Bitcoin software as an approximation of Bitcoin use, the USA, China, Germany, Great Britain, Canada and the Netherlands can be identified as the main areas of use. If these figures are corrected for the different population sizes, however, a somewhat different picture emerges: it is the Scandinavian countries and their neighbors in particular that have a greater spread of bitcoin, i.e. those that are already – relatively speaking – less cash affinity are.
Utopia: a cryptocurrency-only world
Cryptocurrencies today have a market capitalization of around EUR 20 billion, which corresponds to 0.3% of the euro money supply M1. The central banks, including the ECB, are therefore monitoring developments in cryptocurrencies, but they are not perceived as an immediate “threat”. This assessment may also prove to be correct in the medium term if the said critical mass of users is not exceeded. Then cryptocurrencies would be more comparable to the large number of regional currencies (“Chiemgauer”, “Bürgerblute”, etc.), whose repercussions on the monetary policy orientation can be regarded as negligible.
But the assessment can be wrong. To outline the implications, it is illustrative to consider the other extreme case: a cryptocurrency-only world. Suppose there were only bitcoins. A pure bitcoin world will be characterized by deflation. This is quickly sketched using the quantity equation, MV = PY . With Bitcoin, the circulating money supply M is technologically limited to around 21 million Bitcoins. If plausibly the velocity of money V does not increase continuously, with increasing income Y the price level Pfall. So far, there has been little research into how an economy with inherently inherent deflation behaves. The form of investment “money” receives a positive real interest rate, which at least reduces the difference in interest rates to other forms of capital investment. The expectation of falling prices may result in a shift in the demand for goods into the future, resulting in negative output effects in the short term. The scenario of a deflationary economy can be circumvented if the digital currency is not limited in quantity but also shows a positive growth rate in equilibrium. This is the case, for example, with the peer coin, which ad hoc appears to be a superior alternative from a monetary theory perspective.
A previously unanswered question concerns the formation of interest in a cryptocurrency system. Similar to coins and cash, cryptocurrencies like Bitcoin have a zero nominal interest rate. However, once traditional currencies are held in the form of deposits, they typically earn a positive rate of interest, which is funded by borrowers. This process of financial intermediation, which today primarily runs through commercial banks, threatens to erode in a cryptocurrency world that uses blockchain technology. Three alternative scenarios are conceivable:
- The credit conditions will be agreed directly, i.e. peer-to-peer and decentrally, between the parties involved. However, this requires an extremely high demand for information from savers and investors alike.
- Those involved are looking for help on platforms such as BitBond or BTCJam, which are already bringing together loan seekers and lenders. The determination of the interest rate here is diverse and is similar to crowdfunding.
- Appears realistic: A system of securities and derivatives is formed that are denominated in Bitcoin and are traded accordingly. The interest rate then reflects the supply and demand of Bitcoin-denominated loans. It remains to be seen whether such a cryptocurrency world will be able to achieve a maturity transformation similar to that of today’s financial intermediaries.
The real value of a cryptocurrency like bitcoin is measured today using the exchange rate to the euro or US dollar. If more US dollars have to be paid for a bitcoin, ceteris paribus the real value of the bitcoin increases. If, in extreme cases, the national currencies are completely ousted, the problem of determining an adequate price index arises. What is the real value of a bitcoin in a pure bitcoin world? It would be possible to create a harmonized consumer price index that reflects the price of a basket of goods that is representative on a global scale. However, given the massive differences in national preference and thus consumption structures on a global scale, such an index would be largely meaningless. In analogy to the euro area, the use of national indices is an alternative, whereby the real value of bitcoin is then defined differently from country to country. Formulating all prices in the same currency unit makes it easier to compare prices, but the economically more relevant determination of real values is just as complex.
The world as a whole is definitely not an optimal currency area in Mundell’s sense. Putting aside the nominal exchange rate as an instrument for influencing the real exchange rate, and even more so putting aside national monetary policy, is controversial in the euro area; on a global scale it would be absurd. This fact answers the question of whether utopia in the sense of a pure cryptocurrency world is even desirable with a clear “no”. Even competition between several cryptocurrencies would not change this, because the exchange rates that occur between the respective cryptocurrencies would have nothing to do with the economically necessary adjustments between two countries or groups of countries. Should cryptocurrencies partially displace traditional currencies in a competitive process, this speaks for a gain in efficiency, and the resulting market solution is to be welcomed in principle. A complete ousting, on the other hand, would go hand in hand with the loss of stabilization instruments that are undoubtedly necessary. From a macroeconomic perspective, the continuation of traditional currencies with traditional monetary policies is therefore preferable to the pure cryptocurrency world.
Cryptocurrencies and Central Bank Policy
Both extreme scenarios – cryptocurrencies remain a marginal phenomenon or they completely displace traditional currencies – appear unrealistic. A permanent coexistence of cryptocurrencies and traditional currencies can be expected. The macroeconomic implications of such coexistence are largely uncharted territory. A notable exception is the study by Barrdear and Kumhof at the Bank of England. The authors integrate a cryptocurrency into a “dynamic stochastic general equilibrium” model (DSGE model), whereby the relationship between cryptocurrency and central bank money is fixed as an assumption, so that monetary policy is retained as a stability policy instrument. An interesting result of their analysis: the implementation of cryptocurrencies acts as a growth engine, in the long term the output in a world with cryptocurrencies is about 3% higher than in the world without cryptocurrencies. Hanl and Schwanebeck come to a very similar conclusion.Cryptocurrencies improve the process of financial intermediation, the coming together of savers and investors is associated with fewer frictional losses, the balanced real interest rate decreases, and capital formation is accelerated.
The cryptocurrency affects not only the long-term equilibrium, but also the adjustment behavior of an economy in the event of macroeconomic shocks. A first point concerns the correction of monetary policy mistakes mentioned by Bitcoin inventor Nakamoto, ie traditional monetary policy is seen less as a stabilizer than as a source of disruption or a shock amplifier. Indeed, as Hanl and Schwanebeck show, the cryptocurrency acts as a buffer. Monetary policy shocks, for example in the form of an unexpected rise in interest rates, are mitigated in terms of their impact on output, consumption and investment. The cryptocurrency creates a substitute for traditional banking transactions, so that the monetary policy-induced increase in the cost of bank loans is an evasive reaction towards cryptocurrency,
The other side of the coin: Monetary policy is becoming less efficient. If the decline in investments as a result of a rise in interest rates is smaller, the interest rate instrument loses its effectiveness. If there are shocks in the demand for goods and/or in the supply of goods, the output and inflation effects of which have to be cushioned by monetary policy, then the optimal reaction of monetary policy to the reduced efficiency is increased use of the interest rate instrument. Monetary policy will therefore act more aggressively through the cryptocurrency channel.
Because research into the interaction of cryptocurrencies and monetary policy is only just beginning, various problems can simply be described as open. This applies, for example, to the changed role of commercial banks in the transmission process of monetary policy. If the increased financial intermediation using cryptocurrencies is accompanied by an increased migration to the area of shadow banks, the regulatory authorities will not least become active here. This applies equally to any effects on financial market stability. The role of monetary policy as the “lender of last resort” needs to be reconsidered. It should also be mentioned that cryptocurrencies themselves can cause shocks. The collapse of a platform like Mt. Gox, with the loss of 650,000 bitcoins,
Cryptocurrencies have left the narrow circle of computer nerds and are now a vital part of financial market activity. Accordingly, it is important to understand how they work and how they work, which is not easy due to the rather complex technological background. If further technical developments make handling easier, they have the potential to become a generally accepted means of payment. This is not yet the case, but central banks would be well advised to put the dynamic cryptocurrency field on their research agenda and try to anticipate the implications for monetary policy design as well as for the operation of the traditional tool set.
The fact that cryptocurrencies should not be regarded as temporary hype is largely due to the technological innovation of the blockchain, which after the Internet may be “the next big thing” . For the central banks, the direct consequence is massively increased competition in the area of payment systems. If a large proportion of (cross-border) payments are made peer-to-peer, central banks can no longer guarantee the same degree of stability in payment transactions. Some central banks are actively taking up the challenge and considering using blockchain technology for themselves by issuing their own digital currency.
Bitcoin miners are drawn to the USA
After China declared all transactions related to cryptocurrencies illegal, the so-called Bitcoin miners are turning their backs on the country. The price is meanwhile climbing towards a record high.
The prospectors are leaving the motherland of the crypto trend: for the first time, the United States has replaced China as the global market leader in the lucrative calculation of the digital currency Bitcoin. This is according to the latest figures from the University of Cambridge’s Center for Alternative Finance.
More than a third of the output for so-called Bitcoin mining now comes from the USA, while the People’s Republic has fallen back to an immeasurable proportion in the statistics. With a market share of almost 4.5 percent, Germany is in seventh place worldwide.
Nationwide ban in China
Just a year ago, bitcoin miners in China accounted for around three-quarters of all bitcoin transactions. However, a month ago, the state central bank declared all activities related to cryptocurrency trading illegal. Offenses should be severely punished.
Mining was also banned nationwide in view of the energy shortages. New digital money is created as users provide computing power to encrypt and validate transactions. They are paid for this in the respective currency. However, only the one who delivers the result first gets a chance.
With the rapid triumph of Bitcoin as an investment and means of payment , its energy consumption rose sharply . In the beginning, a normal PC was enough for digging. But the more miners are active and looking for new blocks, the more difficult the arithmetic task (“hash rate”) is. This increases the computing effort – and above all the power requirement. According to estimates by the Digiconomist platform run by Dutch economist Alex de Vries, mining Bitcoin alone requires more than 174 terawatt hours a year, which roughly corresponds to the consumption of the whole of Poland.
Miners flee to countries with low electricity prices
Beijing had already raided crypto miners in the spring. As a result, miners began fleeing China en masse, heading for the world’s cheapest sources of energy. “The whole narrative that China controls bitcoin is now completely moot,” Boaz Sobrado, a London-based fintech data analyst, told CNBC.
The US met many requirements for bitcoin miners looking for a new home. In states like Texas, for example, energy prices are very low in a global comparison. “It’s a great incentive for miners competing in a narrow-margin industry.” The US is also rich in renewable energy sources.
After the announced end of Bitcoin mining in China, many prospectors also migrated to neighboring Kazakhstan, which now has a market share of 18.1 percent. Russia is in third place (11.2 percent), ahead of Canada (9.6 percent), Ireland (4.7), Malaysia (4.6) and Germany. Although electricity prices in Germany are comparatively high, bitcoin mining is worthwhile when a coin is as expensive as it is at the moment.
Bitcoin soaring again
Bitcoin is now moving towards its record high again. For the first time since April, the cyber currency on the Bitstamp trading platform broke the $60,000 mark. For comparison: in mid-July the price was still around $31,000. Bitcoin has gained more than 30 percent in value since the beginning of the month alone.
According to observers, inflation in particular should currently give a boost to the cyber motto. “If the price pressure remains high in the medium term and central banks do not react appropriately, the Bitcoin price should benefit from this,” writes DZ Bank expert Sören Hettler in a comment. Many investors see the cryptocurrency as a protective shield against excessive devaluation of the traditional euro or dollar currencies.
Analyst Timo Emden from Emden Research also referred to the latest statements from the US Federal Reserve and the country’s stock exchange regulator. Both institutions made it clear that digital currencies like Bitcoin should not be banned. In view of the recent price gains, Emden assumes that investors have “largely checked off” regulatory concerns in China. Consumer advocates generally warn against investing in cryptocurrencies because of the strongly fluctuating prices.