The Paypers

The four banking associations Bundesverband deutscher Banken, Bundesverband der Deutschen Volksbanken und Raiffeisenbanken, Deutscher Sparkassen- und Giroverband and Bundesverband Öffentlicher Banken Deutschlands are working together with Commerzbank, DZ Bank, Deutsche Bank, GIZS & Co. KG, Fiducia & GAD IT, Bank-Verlag, S-Payment and paydirekt to standardise the payment solutions of the German Banking Industry Committee, or Deutsche Kreditwirtschaft (DK). The aim is to offer a standard product to cover the various payment channels.

The girocard is Germany’s most widely used payment card in brick-and-mortar retail stores and its system is based on an agreement concluded by the DK. A digital version of the girocard has also been available since 2019, yet in order to use the ‘digital’ girocard for payments via smartphone, customers need to contact the bank managing their account to have this function activated. The DK has announced that the contractual and technical foundations are currently being created to launch the digital girocard in giropay with online payment functions in the second half of 2022.

Initially, giropay’s digital girocard for online payments should be available to customers of the cooperative financial group Volksbanken Raiffeisenbanken. By the end of 2022, this feature will also become accessible to customers of the German Savings Banks Association, also known as Sparkassen and Giroverband. Only then will it become an option for other institutional groups. The plan is to set up giropay as a competitor for PayPal, Klarna and Apple Pay. Therefore, previously isolated payment solutions such as giropay and Kwitt have been merged under the paydirekt brand.

giropay aims to enable customers to pay online and transfer money from account to account among private customers. The Bundeskartellamt, the German Federal Cartel Office, has stated they have no objections to the further development of the giropay payment system envisaged by the DK. In 2020, the Bundeskartellamt had already examined the combination of the giropay, paydirekt, and Kwitt systems. Currently, paydirekt and giropay are offered under the giropay brand which is controlled by paydirekt, a joint venture of DZ BANK, GIZS, Commerzbank, and Deutsche Bank. paydirekt is to enable customers to use the digital girocard for authorising payments made via giropay and is planning to obtain the relevant approval for this purpose within the girocard system.

Online payments via Digital Girocard to debut in second half of 2022