How Germany's EC card is set to go digital

The Local Germany
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How Germany's EC card is set to go digital
A woman pays for a newspaper with her EC card. Photo: picture alliance/dpa | Rolf Vennenbernd

German online payments provider Giropay is struggling to compete with US giants like PayPal and Google Pay. Could a new service for EC card-holders change all of that?


What's Giropay?

Giropay is Germany's primarily online payments service, which is run by a consortium of German banks that includes Deutsche Bank, Sparkasse, Commerzbank and DZ Bank. Its predecessors were the independently operating payment systems Paydirekt, Giropay and Kwitt, which merged into the Giropay brand last year.

Everyone living in Germany will have had some contact with the Girocard - normally termed an Electronic Cash (EC) card - at some point, either by getting one with their bank account or being told, in no uncertain terms, that card payments in a shop or restaurant are "EC card only". 

Though Girocards have a lot of the same functions as debit cards, there's one major downside to them: shopping online. Unlike a normal debit or credit card, you can't generally use this type of card for online shopping, so the alternative is to use a service like Giropay or Paypal that lets you link your bank account to an online wallet and use that for shopping. 

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The problem for Giropay right now is that, despite being supported by around 1,500 banks and credit institutions in Germany, it's struggling to compete with international payments providers like PayPal, Apple Pay and G Pay. When the companies merged last year, they only had a two-percent market share in Germany. A recent study also found that only 16 percent of people had used Giropay in the last twelve months, compared to 93 percent of people who had used PayPal. 

What's changing? 

To try and claw back some customers from the bigger brands, Giropay is creating a digital version of the EC card that can be added to a Giropay wallet and used for shopping online.

This should benefit people who want to avoid the big US brands or for those who cannot or don't want to pay by credit card, bank transfer or invoice. It also allows people with a Giropay account to shop online without revealing their bank details.


How else will customers benefit? 

The main aim of the move is to try and turn EC cards into a product that can compete with credit cards - which includes being able to use them internationally.

Currently, Girocards can only be used abroad if they have the Maestro function from Mastercard or the V Pay function from Visa. However, Mastercard and Visa say they want to discontinue these services in the future.

If the digital Girocard is integrated into the Giropay wallet, it could still be used for online shopping abroad as long as the international merchant supports Giropay.

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Who will be able to get the digital EC card?

The first set of people to be offered this service will be customers of Volksbank and Raiffeisenbanken, followed by savings bank customers by the end of the year.

However, it's likely that a number of other German banks will follow suit at a later date.

According to a study by Stiftung Warentest, customers of the major branch banks Commerzbank, Deutsche Bank, HypoVereinsbank, Postbank, Santander and direct banks such as Comdirect, DKB, N26 and Tomorrow are not yet able to digitally deposit their current cards in payment apps. Instead, they have to rely on using alternative Mastercards or Visa Cards for digital payments. 


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thelocal_462458 2022/05/12 10:19
“as long as the international merchant supports Giropay” - so basically it won’t be international but Germany-only.
andrew_298394 2022/05/11 19:05
I might be underestimating German technological hesitancy but surely this is far too late. Then again, "enter your online banking credentials on this random web form" is still a valid method of payment here. Please just let EC cards die, there's no reason for their existence now interchange fees are capped for debit/credit cards at around 0.3% by the EU.

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