Maestro explained in simple terms

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  1. Introduction
  2. What is Maestro?
  3. What are the advantages of Maestro?
  4. How does a payment using Maestro work?
  5. What are potential alternatives to Maestro?
  6. How does Maestro differ from V-Pay and girocard?
  7. How does Maestro differ from a Mastercard?

The Maestro function on a girocard has been a popular payment method for decades, particularly for payments abroad. In this article, you will learn all about how Maestro works and the advantages that it offers companies and customers.

What's in this article?

  • What is Maestro?
  • What are the advantages of Maestro?
  • How does a payment using Maestro work?
  • What are potential alternatives to Maestro?
  • How does Maestro differ from V-Pay and girocard?
  • How does Maestro differ from a Mastercard?

What is Maestro?

Maestro is a payment system that has been offered by the payment provider Mastercard since 1991. A girocard or a debit card with the Maestro co-badge can be used at millions of places worldwide. Unlike a credit card, customers can only use a Maestro card to spend money that is in their current account.

However, it should be noted that as of July 2023, the Maestro function no longer exists for newly issued girocards. Mastercard has stated that the payment system is not designed for online commerce and that costs are too high. Customers can continue paying with cards that have already been issued until they expire, even when they're travelling internationally. However, since this change, some shops no longer accept Maestro. Customers should therefore check in advance whether the card is still supported by the particular business. Mastercard now offers the "Debit Mastercard" to replace the Maestro function on a girocard.

What are the advantages of Maestro?

Maestro offers businesses and customers a fast, secure and convenient way to receive, withdraw and spend money. As it is accepted by most cash machines and businesses, Maestro simplifies payments, both in shops and online.

It is also easy for businesses to work with Maestro. There is no need to purchase expensive technology or new software or hardware – the only thing that businesses need is a credit card terminal or acceptance software for each of their retail locations.
The key advantage of Maestro is that it is accepted internationally and can be used abroad. Cardholders can use Maestro to withdraw money and make cashless payments abroad. By offering Maestro as a payment method, companies can generate international sales and thus reach new markets.

Maestro offers various security features to prevent fraud, including an NFC chip (NFC stands for "near-field communication") with PIN verification and 3D Secure (3DS) authentication. These features ensure that transactions can only be made by authorised individuals. Furthermore, Maestro offers additional protection against unexpected costs for customers, as transactions may only be carried out up to a certain limit.

How does a payment using Maestro work?

When a girocard is issued by a bank, it often features what is known as a co-badge (from Maestro or Visa, for example). This co-badge enables customers to withdraw money and make cashless payments all over the world. To make a payment in a shop, the card or NFC chip can simply be held up to the card reader. Once the payment data has been submitted electronically, payments over €50 must be authorised by entering a PIN or providing a signature. The transactions made are debited directly from the current account on file.

Some Maestro cards also allow customers to pay online if they have a CVV code, the three-digit security code on the back of the card. When online payments are an option, customers can enter their card number, expiry date and CVV code in the appropriate fields on the payments page. After that, the Mastercard SecureCode procedure, a 3DS procedure, is used to verify the transaction. This is an additional identification step that makes the checkout flow even more secure.

When using the card overseas, it should be noted that some banks may charge additional fees. Customers should also check beforehand how widely Maestro is used in the marketplace in question.

What are potential alternatives to Maestro?

Given the recent changes to the Maestro function, there are several potential alternatives. One of them is that banks could exchange the girocard for another debit card. The functionality of other debit cards is similar in that they debit directly from the account. However, most small shops in Germany do not accept debit cards because of the costs incurred when a debit card that is not a girocard is used.

Another option is for banks to rely on a two-card system, i.e. a girocard for use within Germany and a credit or debit card for use abroad. In the future, an alternative will be to use V-Pay, Visa's payment function, instead of the Maestro badge.

As customers must actively agree to changes to their account, banks will contact them in a timely fashion with updates and alternative options.

How does Maestro differ from V-Pay and girocard?

While Maestro belongs to Mastercard, V-Pay is a payment system belonging to the credit card company Visa. The girocard, on the other hand, was developed by the Deutsche Kreditgesellschaft. These systems have differing levels of acceptance: the V-Pay card can be used throughout Europe, the Maestro card can be used worldwide and the girocard (which doesn't have an additional function) is only accepted in Germany.

How does Maestro differ from a Mastercard?

The biggest difference between a girocard that includes a Maestro function and a Mastercard is that Maestro cards don't have the same capabilities as a credit card. Each transaction is debited directly from the current account on file. Mastercards are available as debit, credit or prepaid cards. With a Mastercard credit card, amounts are collected and normally settled at the end of the month. In addition, the Mastercard credit card has an individually set credit limit. With a prepaid card, the card must have a credit balance. This must be loaded in advance in order to use the card.

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