EC card before the end: German banks are switching to Visa and Mastercard
Created: 06/21/2022, 10:44 am
By: Bona Hyun
The Girocard is on the verge of extinction.
More German banks rely on competitors such as Visa or Mastercard – at the expense of retailers.
But there are also advantages.
Hamburg – The Girocard, formerly the EC card, is an indispensable means of payment in some places.
In 2021, it generated almost half of retail sales.
It is estimated that millions of giro cards are in circulation.
Consumer advocates are therefore looking at the current development with great concern: the end of the Girocard could be pending, as 24hamburg.de writes, since German banks are increasingly relying on US competitors.
What consumers and retailers can expect in the long term when switching to Visa and Mastercard.
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Girocard before the end: Banks are increasingly switching to Visa and Mastercard
The EC card is only offered for a fee or not at all at several institutes.
According to the world, the banks see few opportunities for further development compared to other cards.
Some direct banks would exchange Girocards for Visa or Mastercard debit cards.
Consumers recently had to deal with the failure of EC card payments in certain stores, as the EC card disruption at Aldi and Edeka lasted for several days.
In the long term, consumers would have to say goodbye to EC cards anyway.
The Girocard is on the brink: German banks are switching to Visa and Mastercard.
What are the consequences of the new card usage for consumers and merchants?
(Iconic image) © Michael Gstettenbauer/imago
The end of the EC card?
Consumer advocates worried: "Higher fees for transactions"
According to experts, Visa and Mastercard have set high incentives for banks to use their debit cards.
"They want to oust the Girocard and convert the German market to their debit cards," quoted Die
Welt
Oliver Mihm, head of the management consultancy Investors Marketing.
Consumer advocates are concerned about the development.
Visa and Mastercard could demand significantly higher transaction fees from retailers, according to Claudio Zeitz-Brandmeyer of the Federal Association of Consumer Organizations.
In recent years, other fees that merchants have to pay to the card organization have risen sharply.
Depending on the provider, these could be up to four times higher than for the Girocard, as Ulrich Binnebößel reported to the
world
.
Girocard is becoming obsolete – using Visa and Mastercard would also have advantages
Visa and Mastercard see the competition with the Girocard as an innovation driver that is promoted by the resulting competition.
Consumers and retailers should still have freedom of choice when it comes to payment.
Visa also wants to adjust its fee practices to "enable innovation and the development of new payment products and services."
This was announced by a Visa spokeswoman for the
world
.
Mastercard also sees the development as an advantage for a competitive and functioning payment market.
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Owners of Visa or Mastercards would also have the advantage of being able to pay for online purchases more easily.
Consumers could also easily pay abroad, which would only be possible with the Girocard with an additional function.
Mastercard and Visa are replacing Girocard with debit cards – German institutes are not giving up
Some German institutes are working on the further development of the Girocard and do not want to give it up just yet.
Oliver Hommel from Euro Kartensystems GmbH is convinced that innovations with the help of the Girocard will “become widespread.” Banks and savings banks that are sticking with the Girocard have already combined their online payment processes under the “Giropay” brand in 2021.
What is the difference between debit card and Girocard?
Basically, the Girocard is also a debit card.
Because the term simply means that the amount paid with the respective card is immediately debited from the account.
The difference that is usually meant is that between the Girocard (formerly known as the EC card) and the debit cards from Visa or Mastercard.
The difference is that you can also pay abroad with a Visa or Mastercard debit card.
The card is also not issued by a bank but by a credit card company.
As a result, many mistakenly mistake their Visa or Mastercard debit cards for a credit card.
From the point of view of consumer advocate Zeitz-Brandmeyer, the situation requires a European solution.
The European Payments Initiative would correspond to such an approach, but more and more financial institutions have doubts about a successful implementation.
A national and European system is crucial so that large payment groups no longer gain dominance.
So the future of the Girocard is still open.
