Overview of the latest changes to girocard and Maestro

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  1. Introduction
  2. Whats the difference between girocards, debit cards and credit cards?
  3. Why is Maestro being discontinued?
  4. How much longer will girocards with the Maestro function be valid for?
  5. Impact of the Maestro discontinuation
  6. The future of girocard

girocard, often referred to as the "EC card", has been in use for the past 50 years. There are currently more than 100 million girocards in wallets across Germany, as German banks typically issue them automatically when customers open a current account.

A major shift occurred on 1 July 2023, when the card network Mastercard discontinued the Maestro payment system. Future girocards will not bear the Maestro co-brand. What will happen next and how can customers pay instead – especially when they're abroad?

What's in this article?

  • What's the difference between girocards, debit cards and credit cards?
  • Why is Maestro being discontinued?
  • How much longer will girocards with the Maestro function be valid for?
  • Impact of the Maestro discontinuation
  • The future of girocard

What's the difference between girocards, debit cards and credit cards?

Debit cards are a common type of payment card, while girocards are a special type of debit card and the leading debit card in Germany. It's targeted at the German market and offers a high level of security, data protection and reliability. When customers use girocard or a debit card to make a purchase, their current account is debited immediately and each transaction appears in their online banking platform.

When travelling abroad, customers often need to use credit cards for purchases such as hotel and car hire bookings. There are two types of credit cards: "charge cards" and "prepaid cards". With charge cards, transactions are charged to the credit card account, customers are required to make a credit card payment once a month and the card has a pre-arranged credit limit. Customers must "load" prepaid cards with money before making any purchases. Two of the best-known credit card networks are Mastercard and Visa.

You can find out more about the advantages of debit cards, credit cards and other payment methods here.

Why is Maestro being discontinued?

As of 1 July 2023, after 30 years of girocard payments being made through Maestro, newly issued girocards no longer have a Maestro function. Purchases and cash withdrawals abroad are now only possible with other payment methods, and girocard can only be used without restrictions in Germany.

Mastercard has justified its decision to discontinue Maestro by claiming that the payment system was not designed for online commerce and that costs were too high. In the future, Mastercard customers can use a Mastercard credit or debit card for purchases, instead of paying by direct debit. However, this means that online retailers would have to pay fees to Mastercard. This could also increase the share of debit and credit cards in the German market, as banks begin to replace girocards with alternatives, such as Visa debit cards.

How much longer will girocards with the Maestro function be valid for?

In the past, girocards with the Maestro symbol could be used abroad and these payments were processed by Mastercard. As of 1 July 2023, these girocards will no longer be issued. However, old cards will remain valid until the end of their term, which will be the end of 2027 at the latest. Once the Maestro function no longer exists, customers must make purchases and withdraw money abroad using other payment methods.

Impact of the Maestro discontinuation

Some banks are offering other cards as an alternative to the girocard. Experts believe that girocard issuers will rely increasingly on V Pay, another commonly used co-brand from Visa. However, V Pay focuses primarily on the European market. Most banks previously offered girocard with Mastercard or Visa co-brands. However, this meant that they had to pay double fees to the card issuer, first to girocard and then to either Mastercard or Visa. Customers can also pay abroad using a two-card system: one girocard for use within Germany, and another debit or credit card for use abroad.

If your company is interested in creating and managing a card programme for your customers or employees, Stripe Issuing can help. Issuing gives you full control over spending limits and card design. The cards can be used for a variety of purposes, from expense management to order fulfilment.

The future of girocard

According to EURO Kartensysteme, a joint venture between German banks and savings banks, most banks want to continue issuing co-branded girocards if the customer has had one before. An alternative co-brand, such as V Pay, would still allow German customers to pay abroad. This means that it would only be the logo on girocard that would change. Another possible scenario is for banks to issue girocards with a debit function (i.e. a combination of a girocard and a credit card).

However, customers should enquire about potential additional costs when they open an account or switch cards, as different banks take different approaches. For example, some banks charge an annual base fee for credit cards, alongside additional fees for withdrawing small amounts or shopping outside of Europe. Some banks also charge interest until the balance has been paid.

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