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Germany’s payment scheme Girocard to close it e-purse card function GeldKarte by the end of 2024, the Federal Association of Public Banks (FAPB) has announced.
GeldKarte, launched in 1996 and which pre-dates many modern prepaid and e-money card services, is to be wound down. Allowing German customers to store value on the card to pay for low value items, such as car parking tickets and at vending machines, its usage has declined over the years. The service includes a contactless function, girago, which will also close.
Debit card growth
Geldkarte is operated by Girocard (which is stylised as girocard), an interbank and domestic debit card network that connects up the vast majority of the country’s ATMs and banks since 2007.
Its standards were developed by the German Banking Industry Committee (Deutsche Kreditwirtschaft), an all-encompassing banking association that includes the likes of the Federal Association of Public Banks.
According to the company, the girocard debit card was used to make 5.5bn transactions in 2020, up 22 percent compared to the previous year.
This represents more that 90 percent of all debit card transactions in the country based on data from the European Central Bank.
The cards are sometimes co-badged with either Visa or Mastercard to allow consumers to use them abroad, but most domestic transactions are processed across the girocard network.
And in December 2020, gircocard’s own data shows that 60 percent of debit card transactions in that month were made using contactless functionality.
As a result of this development, fewer and fewer consumers need the prepaid functions GeldKarte and girogo on their bank cards, leading the banking industry to leave them behind.
Some credit institutions are already issuing corresponding girocards without a GeldKarte or girogo function to their customers, according to the association, while all other cards will be exchanged by the end of 2024.
“The GeldKarte has been an integral part of the bank and savings card range since 1996. As a prepaid function for the small change segment, the electronic wallet paved the way for many developments that today make fast and secure card payments with the girocard a matter of course,” the association said in a statement.
The GeldKarte and girogo have created trust in contactless payment and the acceptance of electronic small-value payments and have played a key role in shaping today's payment convenience, the association continued.
“The girocard is the most popular payment medium in Germany and is also often used for small amounts, whether as a physical card or digital. In the future, too, Deutsche Kreditwirtschaft will continue to develop its payment solutions in line with the wishes and habits of customers and dealers.”
Girocard has undoubtedly had a successful few years, with COVID-19 having driven down cash use in Germany, which is a well-known fan of the payment method.
According to statistics from the German Banking Industry Committee, the turnover for girocard was €236bn in 2020, which is an increase of 12 percent from 2019’s €211bn.
However, the girocard may itself be on borrowed time. If the European Payments Initiative (EPI) becomes enough of success upon launching, it is anticipated that national card schemes will fold into the EU-wide project.
