When introducing Apple Pay, the savings banks in Germany were not in the front row. But this summer they will have a real premiere: Apple Pay can then be linked to the Girocard, which is very popular in Germany.
The savings banks will be the first financial institution in Germany to offer their customers the option of using their Girocard for payments with Apple Pay. So far, the most popular smartphone payment method could only be used in connection with a credit or debit card. The Girocard will be used “from late summer” with Apple Pay, as the Sparkassen-Finanzgruppe announced on Wednesday in Berlin.
In Germany, girocards, which many still colloquially refer to as the EC card brand name, which was abolished in 2007, are significantly more popular than classic credit and debit cards from Mastercard, Visa and similar providers. Sparkasse credit cards from Visa and Mastercard have been available for Apple Pay payments since mid-December 2019.
With Apple Pay, customers can use the iPhone and the computer watch to pay for Apple Watch at the checkout as with a contactless card. The payment method can also be used online. The users release the transactions via the iPhone face recognition Face ID or the fingerprint scanner. As a result, the fraud rate is practically zero, according to Apple and participating banks.
The NFC chip in the iPhone or Apple Watch is used for contactless payment at the checkout. Banks can only access it via Apple Pay and a special high-security chip in the device, the so-called Secure Element. When using Apple Pay, the actual numbers are neither stored on the device nor on the Apple servers, the credit card companies Mastercard and Visa emphasized. “Instead, a unique device number is assigned, encrypted and securely stored on the device used. Every transaction is authorized with a unique dynamic security code. ”
The widespread distribution of contactless Girocards by Sparkasse customers has contributed significantly to the fact that contactless payment terminals have been introduced in German retail in recent years. This technical infrastructure now also benefits users of smartphone payment methods such as Apple Pay and Google Pay. 43.7 million of the 45.8 million Sparkasse Girocards are currently contactless (95.6 percent). At the end of 2020, almost all Sparkasse cards should be equipped with the contactless function. In May, 56.6 percent of Girocard payments from Sparkasse customers were contactless.
The savings banks had reacted cautiously to Apple Pay at the end of 2018. But cheers from the first Apple Pay partners quickly made the rounds. At Deutsche Bank you could hear that expectations had been significantly exceeded. Financial institutions that were not there at the start had to listen to complaints from their customers.
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