Frankfurt Savings banks and cooperative banks want to equip the popular Girocard, formerly known as the “EC card”, with a new function on a large scale. This is how you react to the end of the Maestro process for international payments. In the future, a significant proportion of Girocards will also be Mastercards. In technical jargon, this is called “Mastercard co-branding”.
“We were informed in good time and are making preparations so that all Girocards with a Maestro function can be given a Debit Mastercard co-branding if they expire or are exchanged for other reasons,” said Andreas Martin, board member of the BVR cooperative association. the Handelsblatt. The Volks- und Raiffeisenbanken have issued around 27 million Girocards, around 40 percent with the Maestro function and 60 percent with V-Pay, the equivalent of Visa.
The savings banks are proceeding in a similar way. “All savings banks that currently cooperate with Mastercard will gradually issue a card. The Girocard and a Mastercard debit card combined – I’m pretty sure of that,” said Andreas Schelling. He heads the IT service provider for the savings banks, Finanz Informatik (FI). “Savings bank customers can use it to pay worldwide with one card and also shop in e-commerce.”
According to the IT boss, the savings banks will provide more and more customers with such a card as early as 2023 “with this new strategy”. It is currently still a niche product. “So far, 13 savings banks have issued a combination of Girocard and Mastercard debit card, this year 30 to 40 savings banks will follow.” In total there are almost 370 savings banks and around 800 cooperative banks.
Top jobs of the day
Find the best jobs now and
be notified by email.
Today, the Maestro logo – a red and a blue circle – can be found on a large proportion of Girocards. Last October, the US credit card and payment company Mastercard informed European credit institutions that new bank cards with the Maestro function could only be issued until the summer of 2023.
Mastercard will soon abolish Maestro system
The term of the cards is usually a good four years. Maestro can therefore no longer be used at all from the beginning of 2028.
Mastercard justifies the move primarily with the boom in e-commerce. Given the growth in e-commerce, it is time to renew the Maestro cards. They could not be used consistently for payments in online retail.
In Germany, savings banks are the market leaders in business with private customers, ahead of the cooperative banks. Maestro is used by numerous banks and savings banks so that customers can also withdraw cash and pay in other countries with the Girocard – at least at those cash registers that accept Maestro payments.
Competitors Mastercard and Visa offer both credit and debit cards. The cards are issued by the banks, which receive a fee from the retailer for each payment made with a Girocard or other debit or credit card. Mastercard and Visa, in turn, collect fees from the banks for using their payment systems.
For cross-border payments, the financial institutions are even dependent on Mastercard and Visa. Market observers assume that Visa V-Pay will also expire sooner or later. Visa has not yet commented on whether such plans exist or not.
This is one of the reasons why around 30 European financial institutions started the European Payment Initiative (EPI) and considered setting up their own payment system with their own pan-European payment card. However, two thirds of the banks, including DZ Bank, Commerzbank and Hypo-Vereinsbank from Germany, canceled the EPI participation.
Around 100 million Girocards are in circulation
While in some countries the national payments are also made via Mastercard or Visa systems, in Germany the Girocard system of the banks and savings banks takes over. Almost every German bank customer has a Girocard – or two. There are around 100 million Girocards in total. For the IT of the financial institutions, however, the payment processing of co-badge girocards is likely to be more complex than in the case of the previous girocards with Maestro function.
With the decision of the savings banks and Volksbanken, the Mastercard brand is moving more into focus. Many customers probably don’t know that Mastercard is behind Maestro and Visa is behind V-Pay. Also because the Girocard is so widespread, comparatively few credit cards are used in Germany.
At the cooperative banks, only 20 to 25 percent of customers have a credit card. The savings banks have a share of 30 percent.
Unlike a Girocard with a Maestro function, it is easier to pay for online shopping with a Girocard including a Mastercard debit card – similar to a credit card. An exception are payment apps from Volksbanken and savings banks for Android smartphones, Girocards can already be inserted here. However, these in-house systems are used relatively little. Sparkasse customers can also use their Girocard for the payment service Apple Pay for the iPhone.
Trend towards more Girocards expected with Apple Pay
Oliver Hommel expects that “in addition to the savings banks, other banks will offer the option of depositing Girocards with Apple Pay”. In addition, customers should also be able to pay online with the Girocard in other ways, as the head of Euro Kartensysteme, a joint venture of the German financial institutions that markets the Girocard, explains. However, it will not be as easy as paying with a credit card.
“The plan is to technically bundle the Girocard and Giropay,” Hommel told the Handelsblatt. In the future, it should be the case that customers with the Giropay online payment method can choose whether they pay with the Giropay method itself, with Paydirekt or with the Girocard.
In the case of the Girocard payment, you have to confirm the transaction in the app of the respective bank in which the digital Girocard is stored on an Android smartphone. However, the two online payment methods used by German banks, Giropay and Paydirekt, which have been bundled under the Giropay brand, lead a niche existence.
More: “Times are getting much worse” – Europe’s banks fear expropriations in Russia