Cashback or how to earn by paying by card

On average, you will receive 55 euros per year at the Société Générale, and between 24 and 36 euros at the LCL … The amount that banks reimburse their customers for card costs is no longer insignificant. Do these cashbacks really support purchasing power? Are there any trade-offs? Explanation of income.

The main argument of American Express, “cashback” is actively returning among the bank offers. The process of returning some of the money spent to the customer comes from the United States, where it is essentially applied to credit cards to encourage customers to choose credit payments over cash payments. Or to take you to a higher market by reserving these programs for premium bank cards.

Fintech technology has taken control of it: Revolut, the Anglo-Lithuanian bank that has just set up France’s Iban, pays 1% of its purchases with its metal card; German bank N26 pays 0.1% of expenses incurred through business cards and 0.5% for business metal.

Stop or again?

In France, in the past, this process could not take root because banks did not earn enough money on the cards to make such gifts. In 2002, a 1% cashback led to the British Egg disaster that engulfed Zebank, a bank founded by Bernard Arnault. In fact, bank cards, sometimes mistakenly referred to as “credit cards”, are in most cases only immediate or deferred debit cards at the end of the month, and are therefore not genuine margin credit cards.

In addition, in July 2010, the Lagarde Law on Consumer Lending streamlined dual-use cards (credit and cash), imposing a default cash payment. Confusion with expensive revolving credit is, in principle, no longer possible.

However, cashback is actively returning thanks to the creativity of fintechs and marketing experts. To encourage you to use your bank card, while the number of card payments in France has doubled in ten years, increased from 7 to 14 billion between 2010 and 2020. “We protect the purchasing power of our customers with cashback and vouchers. Customers who have received at least one cashback have reimbursed an average of 5% of the money spent on partner brands, ”said Eloise Beldiko, Marketing Director of Ma French Bank, La Banque Postale’s online banking subsidiary. for innovation. and sensitive to the expectations of young people, most love rewards.

According to a Yougov poll conducted in 2021, 39% of French people said they wanted to take advantage of cashback offers related to their bank card. This figure rises to 43% among people under 35 years of age.

Well placed banks

At Société Générale and LCL, these refund formulas have replaced their old loyalty programs. Interested customers of Société Générale must register and buy from partner sellers who pay them 2 to 15% or even more of the amount of their purchases. The program, launched in 2019, has attracted 520,000 members who receive an average of 55 euros a year, which they can donate to associations.

LCL launched its own in 2015. It offers discounts at local stores listed in its CityStore (stores can be found through LCL My Accounts) and a large number of online store sites. Advantage: you just need to pay with an LCL card without pre-registering with the program. Its customers also benefit from the campaigns of national brands: for example, 4% of cashback on Booking.com or Relais & Châteaux, 30% of private sales of branded champagne and more.

Refunds occur automatically and are paid to customer accounts once a month, 30-60 days after purchase in the amount of 3% to 15% of costs, sometimes even more. This is an average of 25 to 30 euros per client per year.

“Banks have good opportunities to develop these programs with resellers, as they can promote their business to a large customer base. This is more difficult for fintech companies, whose active clients remain modest, ”said Benoit Grue, President and Co-Founder of CDLK, which provides technology for the Société Générale and LCL programs.

Paid premium offers

However, consumers have a choice: Aumax for me, a free banking service that offers to combine all bank cards, created by Crédit Mutuel Arkea, is trying to seduce with cashback available on cards of all banks, with increased rates on paid premium offers. “The customer made a bet of 53 euros per purchase. And if the customer has our Responsible card, his cashback is automatically donated to the Pure Ocean Association with our contribution, ”adds Hugh Mercier, Aumax’s general manager for me.

Lydia’s Individual Settlement Specialist also promises to return 6% (or 30% for the first purchase of the brand) to its registered customers, bonuses that Fintech will increase when using Lydia’s card. The same goes for its competitor Pumpkin, which offers cashback offers with dozens of partners. Don’t forget about distributor banks such as Floa Bank, a subsidiary of the Casino Group.

Who ultimately pays?

From now on, the bank does not necessarily finance the reward, but the trade, which hopes to receive an order that allows you to be generous.

The next step will be to involve producers. “Discount rates will increase because we will be able to direct customers to brands, not stores.

If I can tell Evian that my customers will buy water bottles of her brand regardless of the store and no longer in the chosen location, it will be more valuable than telling the supermarket that I organize 1.5% cashback on purchases from Evian. explains South Mercier.

Each program has its own characteristics. Everyone should do their best.