Use Girocard with Apple Pay: From the online potential of the German debit card
The integration into the Apple Pay Wallet an important step. In her new, electronic environment, she brings her greatest strength, distribution, with her. At the same time, the European Payments Initiative (EPI) with the aim of building a pan-European payment system. What chance does the Girocard still have with its entry into Apple Pay after almost 30 years of e-commerce?
In January 1968, the first banks issued check cards. Together with a check, they were initially intended as payment guarantee cards. With the introduction of the Eurocheque card (EC card), the card changed from a German to a Europe-wide payment option. In the 1990s, thanks to the new debit function, Eurocheque became electronic cash and users could pay with their card and their PIN. The name was changed again 14 years ago, since then the EC card has been called the Girocard. Since 2017 you can use it with NFC-Technology also pay contactless.
For many years, the percentage growth in online sales has been around 10 percent. the Corona-pandemic pushed this development further, so that growth of 23 percent was recorded in 2020. The forecasts for 2021 also look rosy for e-commerce. With card systems such as Visa or Mastercard be paid online. Only the Girocard has so far been looked for in vain by customers among the payment methods. Although the Girocard can be used for online banking, it was previously not possible to pay with it directly at the checkout.
With 100 million cards issued in Germany, the Girocard for the E-Commerce great potential that the German banking industry has withheld from online trading for years. An American company, Apple, first had to enter the business in order to pave the way for the Girocard into e-commerce. Since last year, Sparkasse customers have been able to use their Girocard via Apple Pay pay at the POS. It can now also be used for online shopping via the iPhone’s digital wallet.
If you look at the Girocard via Apple Pay from a technical point of view, it is not an independent payment method, but a so-called settlement payment method. This is used if there is no more credit in the wallet or the wallet manages no credit at all due to the system – as with Apple Pay. For a comprehensive success of the German debit card in online trading, however, other banks and other wallets must step in to further increase market coverage. In addition, the PSPs (Payment Service Provider) support this solution, which represents the interface between online retailers and wallets. This is exactly what worked with the Girocard via Apple Pay: the Sparkasse has digitized 46 million cards and the three largest PSPs in Germany have provided the appropriate interfaces. In order for the new function to be a success, retailers must offer payment with the Girocard in their online shops.
The combination of Girocard and Apple Pay scores points with customers in the area of data protection, among other things: According to a survey carried out in 2017, the debit card is used Bundesbank study Rated more trustworthy by users compared to American map brands. In addition, Apple says it does not store personal transaction data, unlike other wallet systems. Customers benefit in particular from the convenient user experience: e-wallets such as Apple Pay, but also PayPal or the new Click to Pay are easy to use and the express purchase function ensures a quick check-out. The user’s card and address data are sent directly from the wallet to the retailer. In addition, payment will be made through biometric authentication confirms what makes them particularly safe.
However, the Girocard via Apple Pay not only has advantages for customers, retailers also benefit from this combination. On the one hand, the quick and easy purchase process can increase conversion at check out. On the other hand, the transaction costs for the merchants are lower than with a credit card. Already known from the POS, this bonus is usually retained in online trading. However, the individual cost advantages differ depending on which PSP provides the interface and which acquirer the merchant uses.
The industry and size of the online trade also play a role. In addition, the integration effort of the Girocard as a means of payment in the shop is low, especially for retailers who already offer Apple Pay via their PSP. Only an acceptance contract for the Girocard has to be added. Merchants who still do not have Apple Pay must first have the wallet integrated via a PSP. Due to the large market coverage of the Girocard and the purchasing power of Apple users, retailers can tap into new customer groups.
Reading tip: The most important payment trends
The European Payments Initiative (EPI) is aiming for a Europe-wide uniform solution by the end of the decade by establishing a pan-European payment network (scheme) that is also intended to replace the existing national debit cards with a uniform card. If successful, some industry experts predict the end of the Girocard.
However, the EPI will then have to create technical upward compatibility from national debit cards to the new pan-European card. Only in this way will EU citizens be willing to give up their usual cards in the long term. For merchants who want to offer debit cards with a wallet as a payment option in the future, this means that the possible user group of this combination could expand to customers across Europe who use EPI’s card.
Is the digital Girocard too late for e-commerce? Should the EPI succeed in building up a closed payment cosmos, the Girocard will no longer play a role in it. EPI wallets with instant payments will cover e-commerce, Apple Pay is the EPI card. A physical card will be used at the POS, or a wallet as well. (bw)
Reading tip: E-Payment – Europe is trying to catch up