Apple Pay Apple Pay in Germany

[Nütztjanix]

Or because Apple?

Don't think so. Sparkasse and Volksbanken somehow missed the change of times. I really don't get why there has to be such a fuzz over an isolated thing as girocard. And that one of the many benefits of  Pay (anonymity to the merchant) doesn't even work with it. A shame.

 

[samwa3]

If girocard wasn't so technically limited and maybe if European debit schemes would work together instead of ignoring each other, they would actually be very compelling competitors of Mastercard and Visa.

 

[Moka.sOnkel]

Don't think so.

I am not quite sure. From what I have been hearing it was really a joint effort with a lot of challenges on both sides.

And that one of the many benefits of  Pay (anonymity to the merchant) doesn't even work with it. A shame.

Fully agree on the anonymity issue.

I really don't get why there has to be such a fuzz over an isolated thing as girocard.

The fuzz is all about acceptance.
- There are more than 100 million Girocards out there and over 95% of the population does have at least on girocard. 45 million of that has been issued by Sparkassen. Mastercards/Visa have roughly 30 million cards issued in Germany.
- There are over 755k merchants accepting girocard contactless vs. ca. 450k/500k merchants accepting Mastercard/Visa. Admittedly it is mainly the very small and mostly local shops who prefer girocard over MC/Visa. So you get along well with MC/Visa when you shop at larger store and chains. But locally girocard is hard to beat.
- Why do smaller merchant prefer girocard? It's about fees. In average Girocard transactions cost about 1% while MC/Visa will cost ca. 2%. Individually it obviously depends on how you negotiate with your acquirer. In my view this advantage is mainly due to the scheme fees. The Interchange fee is regulated anyway, the acquiring fee will not differ much. MC/Visa do charge a hefty Scheme fee which is not the case for girocard payments as girocard is (sort of) basically using the same infrastructure as all German banks are using for transferring funds from one account to another without having to maintain a separate scheme for card transactions.
- Why are there so many Girocards out there. It is because every German checking account comes with girocard as the default debit card. (With very, very few exceptions of some neo-banks like N26 and the like)

This combination of market penetration with the consumer, number of merchants accepting girocard and fees sets a scene which is pretty hard to beat - especially as many Germans do not care about technically more advanced features of the international credit/debit cards MC/Visa and their girocard is co-badged with Maestro or V-Pay for use abroad.

 

[JulianGoesPro]

The other large banking cooperative - V&R Banken - has clearly positioned itself against Girocard in an interview at the end of July 2020. Unless they change their mind they will not introduce Apple Pay support for their Girocard.

I was hoping for my VR Account to support that soon but hearing that I am now thinking about opening a Sparkasse account... does that make sense? I moved most of my funds back to DKB after opening up a Comdirect account for Apple app and later getting a Payback MasterCard to “play with” but seeing DKB giving me (even though very little) Zinsen I barely use Comdirect or VR anymore... don’t even have a Visa card with VR...

 

[Nütztjanix]

I am not quite sure. From what I have been hearing it was really a joint effort with a lot of challenges on both sides.

Look, this effort was only necessary because of this whole girocard mess.

Fully agree on the anonymity issue.

Thanks.

The fuzz is all about acceptance.
- There are more than 100 million Girocards out there and over 95% of the population does have at least on girocard. 45 million of that has been issued by Sparkassen. Mastercards/Visa have roughly 30 million cards issued in Germany.
- There are over 755k merchants accepting girocard contactless vs. ca. 450k/500k merchants accepting Mastercard/Visa. Admittedly it is mainly the very small and mostly local shops who prefer girocard over MC/Visa. So you get along well with MC/Visa when you shop at larger store and chains. But locally girocard is hard to beat.
- Why do smaller merchant prefer girocard? It's about fees. In average Girocard transactions cost about 1% while MC/Visa will cost ca. 2%. Individually it obviously depends on how you negotiate with your acquirer. In my view this advantage is mainly due to the scheme fees. The Interchange fee is regulated anyway, the acquiring fee will not differ much. MC/Visa do charge a hefty Scheme fee which is not the case for girocard payments as girocard is (sort of) basically using the same infrastructure as all German banks are using for transferring funds from one account to another without having to maintain a separate scheme for card transactions.
- Why are there so many Girocards out there. It is because every German checking account comes with girocard as the default debit card. (With very, very few exceptions of some neo-banks like N26 and the like)

This combination of market penetration with the consumer, number of merchants accepting girocard and fees sets a scene which is pretty hard to beat - especially as many Germans do not care about technically more advanced features of the international credit/debit cards MC/Visa and their girocard is co-badged with Maestro or V-Pay for use abroad.

Yeah, I know about the acceptance problem. But that is the core of the problem - it would be a lot easier for everyone if we would use some compatible system instead of our isolated German girocard.

 

[Eric Idle]

273 pages on Apple Pay in Germany. What. The. Heck. Is. This. About????

 

[LarsN.]

273 pages on Apple Pay in Germany. What. The. Heck. Is. This. About????

Not everyone seems to be idle as you.

 

[Eric Idle]

Not everyone seems to be idle as you.

How can there by that much to say about Apple Pay in Germany?

 

[JulianGoesPro]

How can there by that much to say about Apple Pay in Germany?

Basically it took “us” till a few days ago to get the first bank to support Apple Pay with the “common” card type we use here... “EC”

...Amex/Visa/MasterCard was a big hurdle too...

 

[Nütztjanix]

How can there by that much to say about Apple Pay in Germany?

If you read the thread, you may find out.

 

[Eric Idle]

If you read the thread, you may find out.

I'm 52 years old. I don't think I have that much time!

 

[nicho]

How can there by that much to say about Apple Pay in Germany?

The vast majority is about "No Apple Pay in Germany".

 

[Nütztjanix]

I'm 52 years old. I don't think I have that much time!

You must be a slow reader then ?

 

[Moka.sOnkel]

How can there by that much to say about Apple Pay in Germany?

It's about 50 pages for the 4 years it took Apple to announce Apple Pay for Germany after it had been introduced in the US.

Then it's about 150+ pages between the announcement and the actual start of the service!

Plus now some 70 pages in the 20 months the service is live.

There is a lot about a special German solution for payment cards called Girocard - which get people excited in both ways. Some hate it, some love it. This makes a fertile ground for lots of discussion.

 

[Moka.sOnkel]

Look, this effort was only necessary because of this whole girocard mess.

But obviously both Apple and the Sparkassen thought the effort is worthwhile.

I think it's about scale. Sparkassen have 46m Girocards out in the wild. With a market share for iOS of roughly 22% percent this makes 10m cards. I do not believe any other banking group in Germany or Europe has that kind of scale.

Again, I am not saying that Girocard is a perfect thing technically. It probably is the opposite. But quite frankly, most people do not care. And even I - with some understanding of technical backgrounds - are intrigued by the advantage in acceptance.

Girocard is hard to beat in germany because of
a) acceptance [755k merchants vs. 500k for MC/Visa] and
b) transaction fees for merchants [the merchant pays ca. 1% for Girocard vs. ca. 2% for MV/Visa transactions] and
c) penetration [in Germany 95% of the population has one and most use it frequently].

This combination is pretty hard to beat as I can not imagine that MC/Visa will half their fees which would be the starting point to break the acceptance barrier and the banks will not offer MC/Visa credit or debit cards for free as they have to pay licence fees to MC/Visa which they do not have to pay for their girocards as it is based on the German banking infrastructure itself.

Yeah, I know about the acceptance problem. But that is the core of the problem - it would be a lot easier for everyone if we would use some compatible system instead of our isolated German girocard.

What would be a lot easier?

Are you seriously proposing of using just one card? That's fine if it works out for you. But it would never work out for me.

I am using several different payment cards in order to separate business and private expenses. Also with MC or Visa you can occasionally run into acceptance problems when traveling internationally. That's why I love to have a backup card. And I don't mind adding one more to my Apple Pay wallet. It is not so burdensome to switch cards if someone does not accept your default card.

I like choice and I like competition and in that sense I like Girocard as well.

 

[Nütztjanix]

Are you seriously proposing of using just one card? That's fine if it works out for you. But it would never work out for me.

I'm most certainly not.

What I said is, it would be much easier (international usage, internet usage, and, in this specific case, Pay), if we hadn't reinvented the wheel for our most used domestic payment card system.

 

[Moka.sOnkel]

What I said is, it would be much easier (international usage, internet usage, and, in this specific case, Pay), if we hadn't reinvented the wheel for our most used domestic payment card system.

I don't quite get that. Who has re-invented the wheel for Girocard?

In my view Girocard got a necessary update, not more. And I just hope that online- and in-app usage for Girocard will be implemented without using the co-badge of Maestro/V-Pay/MC. What will remain is the lack of international acceptance of Girocard - unless in the distant future there is something useful coming out of EPI.

Quite frankly I am not a friend of using just one system which may be functioning well and has great international acceptance but is expensive for the merchants and furthermore controlled by companies in a country with most erratic leadership. It is not hard to imagine that some guy could get the idea of blocking such a system like the crusade against everything Chinese.

In that sense I am quite happy that Girocard was and continues to be modernised. In the end it is based on the infrastructure of the German/European banking system which is not so bad after all. I very much hope that the European banks will get their act together and get a decent and consumer focused product out of EPI - although I have my doubts.

 

[samwa3]

In that sense I am quite happy that Girocard was and continues to be modernised. In the end it is based on the infrastructure of the German/European banking system which is not so bad after all. I very much hope that the European banks will get their act together and get a decent and consumer focused product out of EPI - although I have my doubts.

Some people are probably just fed up hoping and waiting. Modernization of Girocard happens, but at a snail pace in comparison to MC/Visa. And as you said, there's no international acceptance unless there is. I think that is what they don't like about "reinventing the wheel". If we would've reinvented the wheel and made it a better wheel, then the situation would be a different one.

 

[Moka.sOnkel]

Some people are probably just fed up hoping and waiting. Modernization of Girocard happens, but at a snail pace in comparison to MC/Visa. And as you said, there's no international acceptance unless there is. I think that is what they don't like about "reinventing the wheel". If we would've reinvented the wheel and made it a better wheel, then the situation would be a different one.

Quite right.

For me the current situation is good enough and I am certainly neither fed up hoping and waiting nor do I really wait for something. Using a MC credit card as my default card in AP and having a Girocard as a backup for those German merchants who do not accept MC/Visa plus another Visa as additional backup I get around almost everywhere worldwide without my purse and use cash mostly for tips only. And seriously I do not feel that switching cards in AP Wallet is very burdensome and see no need to be frustrated for waiting on a better wheel.

 

[NklsPln]

Does anybody know details for comdirect girocard integration?

 

[LarsN.]

Does anybody know details for comdirect girocard integration?

No, I would be more interested in the details for other banks like DKB or Deutsche Bank, but unfortunately they are not allowed to let us know anything.

 

[Moka.sOnkel]

Does anybody know details for comdirect girocard integration?

No, I would be more interested in the details for other banks like DKB or Deutsche Bank, but unfortunately they are not allowed to let us know anything.

No other banks than the Sparkassen have mentioned anything positive about making Girocard compatible for Apple Pay.

Quite to the contrary: V&R have publicly said that they will not do so but rather push their virtual Mastercard Debit. DKB has run advertisements asking customers not to use Girocard but rather their Visa card. And as far as I know have all other banks kept mum about compatibility of Girocard with Apple Pay. comdirect is being integrated into Commerzbank and seeing a severe brain drain because of that. Combined they have their handful of other problems more pressing than this issue.

Don't hold your breath for other Girocards in Apple Pay.
I'd rather open an account at my local Sparkasse and ask for their Girocard.

 

[Nütztjanix]

Or just use one of the numerous accounts with free VISA/Mastercards that are Pay compliant.

 

[Moka.sOnkel]

Or just use one of the numerous accounts with free VISA/Mastercards that are Pay compliant.

Or use Klarna VISA with your existing account.

However, both options will run into problems if you're shopping at many smaller merchants in Germany. Girocard is accepted by well above 750,000 merchants in Germany while Mastercard/VISA are accepted at below 500,000 merchants. It's especially the smaller shops who shy away from the hefty fees Mastercard/VISA is charging of ca. 2% vs. less than 1% for Girocard.

My default card is a Mastercard and I am not defending Girocard at all - but just stating facts. And I am happy to have Girocard in Apple Pay exactly for the acceptance issue. With my shopping pattern the places where I can pay with Apple Pay have grown by 50% with the introduction of Girocard in Apple Pay. (⅔ of the merchants where I shop accepted MC/VISA and Girocard but the other ⅓ is Girocard only). And that is statistically in line with the a.m. acceptance numbers.

 

[Nütztjanix]

Or use Klarna VISA with your existing account.

However, both options will run into problems if you're shopping at many smaller merchants in Germany. Girocard is accepted by well above 750,000 merchants in Germany while Mastercard/VISA are accepted at below 500,000 merchants. It's especially the smaller shops who shy away from the hefty fees Mastercard/VISA is charging of ca. 2% vs. less than 1% for Girocard.

My default card is a Mastercard and I am not defending Girocard at all - but just stating facts. And I am happy to have Girocard in Apple Pay exactly for the acceptance issue. With my shopping pattern the places where I can pay with Apple Pay have grown by 50% with the introduction of Girocard in Apple Pay. (⅔ of the merchants where I shop accepted MC/VISA and Girocard but the other ⅓ is Girocard only). And that is statistically in line with the a.m. acceptance numbers.

I know. Been there, done that. Fortunately, the situation has somewhat improved "thanks" to the pandemic. Even merchants who didn't accept any kind of non-cash payment before, have now adopted at least girocard (lots of bakeries, for example).