Mastercard is phasing out the Maestro system

Sparkasse Girocard with Maestro function

Mastercard wants to end its Maestro function in the foreseeable future. Cross-border payments with girocards would then be processed via Mastercard itself.

(Photo: dpa)

Frankfurt The customers of German banks have to be prepared for changes to their girocard. In the future, many Girocards, better known under their old name “EC-Karte”, will no longer have the Maestro logo but “Mastercard”. Maestro is a function of the US credit card provider Mastercard.

Mastercard informed European credit institutions last week that new bank cards with the Maestro function may only be issued until summer 2023. This emerges from a Mastercard letter that is available to the Handelsblatt. First the industry service “Finanz-Szene” reported about it.

Maestro is currently being used by numerous German financial institutions so that customers can withdraw and pay with the Girocard in other countries – at least at those cash registers that accept Maestro payments. Payments in Germany are made via the girocard system of the German banks and savings banks.

Almost every German bank customer has a girocard – or two of them. There are more than 100 million girocards. The users of the Maestro function include, for example, Deutsche Bank, most of the savings banks and many cooperative banks. The counterpart of the competitor Visa is V-Pay.

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Overall, the Mastercard brand is moving more into focus. Because many customers probably don’t know that Mastercard is behind Maestro. Also because the Girocard is so widespread, comparatively few credit cards are used in Germany.

Change was emerging

The foreseeable end of Maestro payments has manageable consequences for German bank customers: On the one hand, many girocards will only expire after 2023 and will only then have to be replaced. On the other hand, paying abroad will work in the same way as before. The acceptance of Mastercard payments in retail is even higher worldwide than that of Maestro payments.

You can also pay for online shopping with a Girocard, which is also a Mastercard debit card – just like with a credit card. This has not yet been possible with the Girocard.

Mastercard justifies the move primarily with the boom in e-commerce. Given the growth in online retail, it is time to renew the Maestro cards. They could not be used consistently for payments in online trading.

The German Savings Banks and Giro Association, which represents the 370 savings banks, stated that the changes had already become apparent. The Sparkassen-Finanzgruppe has already reacted to this: Some Sparkassen have used new Sparkassen Cards that combine the Girocard and Mastercard debit card procedures, known in technical jargon as “co-badging”. They would be available to the savings banks for issue and as a possible successor product.

Other financial institutions, such as the Volks- and Raiffeisenbanken, are also grappling with it. The lobby association BVR announced that the future direction of the cooperative finance group has been checked for a few months. As an alternative to Maestro, a conversion of the co-badging to “Debit Mastercard” or “V-Pay” or “Visa Debit” could be used for the relevant cards from mid-2023.

Europe’s banks are considering starting their own payment system

Upon request, Visa stated that the company would continue to “fully support” V-Pay as a product, the issuance of V-Pay cards and the Visa acceptance network. This means that cardholders can continue to pay with V-Pay in stores. However, the company did not comment on the question of whether there are any considerations to also phase out V-Pay.

In addition to girocards and credit cards, a number of German financial institutions also issue pure debit cards from Mastercard or Visa. Their number has increased significantly in recent years.

The relationship between the banks on the one hand and Mastercard and Visa on the other hand is ambivalent. On the one hand, both sides are partners. The money houses issue Mastercard and Visa debit and credit cards. You use the systems for payments and cash withdrawals abroad.

On the other hand, the banks are dependent on the two US corporations. In some European countries, the national payment systems are even based on Mastercard or Visa technology.

This is one of the reasons why around 30 European banks, including the savings banks, are checking whether they are setting up their own payment system. The European Payment Initiative (EPI) is also supposed to counter the US payment service PayPal. Financial institutions expect investments of 1.5 billion euros by 2026. Whether EPI will actually come will be decided this year.

More: Consumers still prefer to pay with cash at the till.

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