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Banks test touch-free payment cards

The Local · 12 Jan 2012, 08:50

Published: 12 Jan 2012 08:50 GMT+01:00

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The “Girogo” system, unveiled on Wednesday, will allow users to pay for items that cost up to €20 by simply waving their new debit bank card in front of a reader.

The pilot project begins in April in Hannover, Braunschweig and Wolfsburg and is backed by the powerful Sparkasse-Finanzgruppe the umbrella organisation for hundreds of savings banks operating under the Sparkasse brand.

The pilot scheme will see more than 1.3 million customers getting new bank cards which they can use at shops such as the Thalia bookseller, Esso service stations and other businesses.

If the pilot runs successfully, Sparkasse could begin replacing all customers’ 45 million bank cards this August, a process which would take until the end of 2014. The Volksbank group of banks could also sign on if the pilot project goes well, beginning in 2013.

Though touch-free payment systems have been popular in other countries where many people have credit cards, such as Australia and the United States, security fears and low levels of credit card usage have delayed their introduction in Germany.

But several German banks, including BW-Bank, DKN and Targobank are this year sending their customers cards that use Visa’s new touch-free “payWave” system. MasterCard also has introduced its own competing system.

Industry leaders admitted the Girogo system has cost more than €10 million to develop and would incur significant start-up costs, such as introducing new card readers to businesses.

But they hope that if it catches on, people will use the cards instead of lots of small amounts of cash, reducing handling costs for everyone involved.

Story continues below…

It could also encourage consumers to buy more product that they wouldn’t normally if just paying in cash – previous studies have shown that easy-to-use credit cards and touch-free payment systems encourage consumers to spend more money.

The Local/DPA/mdm

The Local (news@thelocal.de)

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Your comments about this article

10:09 January 12, 2012 by InventorNC
Sounds like RFID - radio frequency ID cards. Crooks love 'em. They read them then use them.

US passports are also RFID.

There are RFID-proof wallets available that prevent them from being read by the wrong people.
11:24 January 12, 2012 by pepsionice
Yep, RFID. Some advice....these RFID-proof wallets....do a bit of research before you buy one. Some are totally bogus. Expect to pay $20 for a legit cheapo one.

I would not count on these cards being around for more than five years. Kids will eventually figure out how to scan for them and work their magic in creating bogus to quickly charge for beer or such. I wouldn't accept such a card....even if you offered me some incentive to the deal.
11:38 January 12, 2012 by auniquecorn
they already said its a scheme in the article, makes you wonder.

you can charge up to 20€? and is that with the 9 € service charge per use included?
00:31 January 15, 2012 by green idea factory
Auniquecorn, are you "American"? "Scheme" just means plan or project etc. in British English -- it is not pejorative.
14:12 January 19, 2012 by mohawk
Indeed it is RFID based.

One interesting thing is why they are implementig own solution if VISA & Mastercard already have their own implementation (PayWave & PayPass) and in many countries both are already in use. And I don't think that anybody outside Germany will adopt another system.

Second thing is that people selling those RFID-wallets are doing fine because of such comments. In PayWave & PayPass you can't scan anything useful (each transaction has own unique auth code based on keys on chip which are not avaliable via RFID interface). And you also don't have details like CCV2 in RFID.

Finally the cheapest RFID-wallet is to wrap some aluminium foil around card and voila :)
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