Frankfurt In the next six months, many Sparkasse customers will receive an e-commerce-enabled Girocard. Around a third of the 46 million cards in total are expected to be exchanged this year, as Joachim Schmalzl, board member of the German Savings Banks and Giro Association (DSGV), said at the Savings Banks Day this week. The entire exchange is spread over three years.
With the Girocards, better known under the old name “EC card”, of most savings banks, the Maestro and V-Pay functions will be replaced by Mastercard and Visa in the future.
To date, almost all Girocards issued by savings banks have used the Maestro function – a Mastercard application for foreign payments at the cash register. But the US payment group will discontinue the function. With a few exceptions, banks can therefore only issue new cards with the Maestro function until July of this year.
No more Maestro function: Girocards still remain debit cards
As an alternative, savings banks and Volksbanks will in future use Mastercard and Visa as an additional function on the Girocards, in technical jargon “Co-Badge”. In addition to paying abroad, the co-badges from Mastercard and Visa also enable online payments – very similar to what is possible with a credit card. The new Girocards will also mostly be equipped with a 16-digit number.
However, Girocards remain debit cards. All payments are debited directly from the account.
The new co-badge enables savings bank customers who have stored their Girocard in the smartphone wallet on their iPhone to now also be able to pay abroad with Apple Pay. So far, this was not possible with Maestro or V-Pay.
Around 60 percent of savings banks have opted for the Girocard with Mastercard. The rest rely on Visa, which is a significant gain for the second US payments group. So far, only a few savings banks have used V-Pay, the Visa counterpart to Maestro. Visa has not yet announced an end date for issuing new girocards with V-Pay as a co-badge.
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In contrast to the Volks- und Raiffeisenbanken, only a smaller proportion of savings bank customers have to expect that they will be asked for approval by the financial institutions in the course of the card exchange. “The new card terms and conditions are included in the existing terms and conditions of 80 percent of the savings banks,” says Schmalzl.
The background to this is that the banks adjusted their general terms and conditions (GTC) two years ago after a ruling by the Federal Court of Justice and had to obtain customer consent for the current fees. The savings banks have already added the conditions for the new Girocard types to the new terms and conditions. The judgment was directed against Postbank, but affects all banks due to the fact that the general terms and conditions are similar across the industry.
Volksbanks ask customers for their consent
Many cooperative banks, where cards will be exchanged from the end of August, on the other hand, have to have the conditions for Girocard with Mastercard or Visa approved by customers again.
“We have recommended our members who make a co-badge change to obtain agreement to the terms and conditions,” said the industry association BVR on request. The newsletter “Finanz-szene” had previously reported, among other things, that individual cooperative banks are already asking customers for their approval.
According to the BVR, the cooperative institutes will exchange around 6.6 million Girocards this year, more than half of which will use V-Pay. Some Volksbanks may continue to issue Girocards with Maestro from July.
Pilot project: The e-commerce function is widely used
Several private banks that issue Girocards have not yet commented on the specific procedure for future co-badge use. In some cases, they should also rely on Mastercard’s extension of the deadline. Several foreign and online banks mainly offer debit cards directly from Mastercard and Visa and only marginally offer Girocards.
Some European countries have their own card payment systems, similar to the German Girocard. In other countries, banks mainly offer Visa and Mastercard debit cards.
Six savings banks have already started or even completed the conversion to Girocards with an additional Mastercard function. A savings bank has introduced Girocards with Visa as a pilot. The e-commerce function is widely used, significantly more than Giropay, says Schmalzl. Giropay is the online payment method of the German banks, the company behind it is called Paydirekt.
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