Differences and implications Debit card instead of giro card - what consumers need to know now
Bonn · The debit card is gaining in popularity with banks, while giro cards are seldom issued any more. We clarify the differences between the cards and the consequences for consumers.
From July 2023, Mastercard will discontinue the Maestro function for giro cards (also called EC cards), so that you will then no longer be able to pay using this card abroad. This is why banks are now increasingly issuing debit cards. But what is the difference between these cards and what are the consequences for giro card users in the future?
Differences between giro and debit cards
At first glance, giro cards and debit cards appear to be the same: Customers can use both cards to withdraw cash and make cashless payments. Moreover, the money is debited directly from your current account (and not at the end of the month as with a credit card). That is what the Federal Financial Supervisory Authority (BaFin), among others, is pointing out. However, the giro card only covers German banks, so a pure giro card can only be used to make payments in Germany. For payment transactions abroad, giro cards must be equipped with a Maestro or V-Pay function, covering banks worldwide or Europe-wide respectively. But MasterCard is discontinuing its Maestro function from July 2023.
David Riechmann, financial expert of the consumer advice centre NRW, thinks that the reasons are monetary: You can’t pay online with a giro card, but you can with a credit card, he explains in an interview with the GA. Since online trade has grown considerably, especially in the past two years, credit cards are now more profitable for Mastercard than giro cards. There are no additional fees for the consumer paying with a credit card, but there are for the traders - and more than when paying with giro cards. Riechmann explains that this means that the giro card has the highest acceptance among retailers in Germany. But what does this mean for consumers in concrete terms?
Consequences for consumers
Without the Maestro function on a giro card, payments and cash withdrawals abroad will no longer be possible after the end of the validity period - i.e. from 2027 at the latest. A debit card will now replace the giro card, as this can be used abroad as well as in online commerce. But until then, according to Riechmann, some problems still have to be solved.
For one thing, he said, the chipTAN procedure is not possible with the debit card. "This security procedure is considered the most secure, as hackers and viruses cannot attack the stand-alone devices," explains the financial expert. In addition, many car rental dealers have not accepted giro or debit cards so far, but only credit cards. The reason for this, he says, is that dealers don’t have to bear the costs in case of damage if a credit card number has been deposited.
"However, giro cards will not be stamped out in the future, I can take away that worry," Riechmann states. He advises people to contact their own bank and find out about alternatives to the giro card as well as the future fees of the different cards, as banks sometimes proceed differently. However, he assumes that the institutions will have come up with a solution by July 2023 so that worldwide payment transactions will continue to be possible for all customers. Payment transactions within Germany will remain unaffected by the discontinuation of the Maestro function. "A credit card can be cancelled. So if you are spending a month abroad, for example, and want to be on the safe side, you should consider applying for a credit card for the period," Riechmann concludes.
Original text: Katja Fillmann
Translation: Jean Lennox
