The EC card is still present in Germany—at least colloquially; it was discontinued almost 20 years ago and replaced by the girocard, but the girocard is often referred to as the EC card. In this article, we’ll look at what EC card payments are, how they work, and what businesses need in order to offer EC card payments. We will also discuss what costs and fees business owners can expect, and whether businesses are legally required to accept EC cards payments.

What’s in this article?

• What is an EC card payment?
  
• How do EC card payments work?
  
• What do retailers need in order to offer EC card payments?
  
• What are the costs and fees associated with EC card payments?
  
• Are retailers legally required to offer EC card payments?
  

What is an EC card payment?

An EC card payment is a cashless payment method that allows cardholders to make payments in stores. The EC card has a long tradition in Germany. Originally, EC stood for “Eurocheque process.” It was introduced in the early ’70s to make it easier for bank customers to pay by check abroad without using cash. The EC card provided a guarantee for the secure cashing of “Eurocheques,” as paper checks were often not accepted.

A few years later, with the introduction of the electronic cash process, plastic cards with magnetic strips replaced paper checks. These new cards enabled cash withdrawals at electronic cash terminals—also called EC terminals—as well as cashless payments in stores with personal identification numbers (PINs). In the late ’80s, the electronic debit card was developed and, powered by Mastercard, it expanded to international financial institutions.

The classic EC card was discontinued in 2007, when banks in Germany merged their electronic cash systems with the country’s automated teller machine (ATM) network. The girocard was then launched, with the aim of standardizing payment processes in Germany and simplifying cashless payments within the EU.

Today, the girocard—the successor to the EC card—is the most widely used payment card in Germany. In 2024, 7.9 billion payments were made using the girocard; this represents a 5.6% increase for Germany’s retail sector compared to the previous year. Since use of the EC card has become firmly ingrained in Germany, and it is used just like the girocard, it has become common to use the phrase “EC card” in colloquial language to refer to the girocard.

How do EC card payments work?

Paying with an EC card, or girocard, is easy for cardholders and businesses alike. Here’s what the process entails.

The card is inserted into the reader

A customer inserts their card into the card terminal or holds it against the card reader to make a contactless payment. A smartphone can also be held to the reader if the card is stored digitally in a payment app.

Authorization occurs

Payments are verified using the cardholder’s PIN or their signature, depending on the merchant’s payment service provider. When making contactless payments for amounts under €50, typically, neither a PIN nor a signature is required. The PIN is only required occasionally for security reasons. In most cases, holding the card to the terminal is enough.

The terminal connects to the checking account

The EC card is essentially a debit card. This means it’s directly linked to the cardholder’s checking account. When a user makes a payment at a point of sale (POS), the terminal connects to the bank account and withdraws the amount due directly from it. However, this only happens when the payment is verified with a PIN. In this case, the terminal sends a request to the bank to check the account balance—the payment will only be authorized if there are sufficient funds in the account to cover the amount due. For the merchant, this process carries a fee, but it guarantees that the amount is earmarked and received safely.

If the payment is verified with a signature, there are no costs to the merchant. In this case, there is no confirmation that the account holds the required funds. By signing, the customer authorizes an electronic direct debit, and they can also reverse the direct debit.

The payment is processed

Businesses generally don’t process payments themselves, as they can outsource this to specialized service providers. By enabling secure communication between the banks’ and business’ payment systems, technical network operators (TNOs) ensure that transactions are processed properly. However, TNOs tend to work exclusively with larger businesses, such as major supermarket chains or international retail brands, which handle a considerable number of transactions.

For smaller businesses, such as cafés, hair salons, or small retailers, direct partnerships with TNOs are often impractical. Instead, these businesses rely on Commercial Network Operators (CNOs), which manage the commercial aspects of payment processing while outsourcing technical processes to TNOs. This allows smaller businesses to take advantage of the secure and reliable payment systems that large retail chains also use.

Funds are transferred and the customer receives confirmation

Once the payment has been approved, the amount is transferred from the customer’s checking account to the merchant’s business account. The transaction can take up to a few days. At the POS, the customer immediately receives confirmation of the payment, usually as a receipt. This receipt serves as proof of the transaction and can be used for returns or complaints. If a transaction subsequently needs to be canceled, a chargeback can be initiated.

What do retailers need in order to offer EC card payments?

Businesses wishing to offer EC card payments as a payment method must take various technical and logistical factors into account.

Card readers

The basic technical requirement for accepting EC payments is a card terminal that can read EC cards. Such terminals can be wired or mobile. Wired devices are located in a fixed spot, are powered through a cord, and can be connected to the internet via a wall outlet. Mobile readers are portable and can therefore be used anywhere. They connect to a base station via Wi-Fi or Bluetooth—which also allows them to be recharged. They are especially well suited for businesses that plan to bill their customers both at points of sale in-stores and external locations (e.g., face-to-face at a farmer’s market).

Stripe makes it easy for your business to offer card payments. With Stripe Terminal, you receive a pre-certified card reader, such as the S 700, or a mobile device, such as the BBPOS WisePad 3. Tap to Pay is another mobile option, allowing you to accept contactless payments directly on iPhones and Androids, without the need for additional devices. Modern POS systems support these payment options. Otherwise, purchasing a new POS system is necessary.

Employee training

Once the technical requirements for EC card payments have been met, it’s important to train employees on how to use the business’s new devices. This ensures a smooth process and prevents errors when using the card terminals. Businesses should also communicate their new payment option to customers, for example, with a sign at checkout.

What are the costs and fees associated with EC card payments?

Business owners wishing to offer debit card payments should consider the costs—which can vary significantly based on the payment provider they select and their business’ sales volume.

The one-time costs for purchasing a card reader for POS payments must be taken into account. The price of card readers typically ranges from €50 to €500, depending on the model and manufacturer. Alternatively, card readers can be rented for under €20 per month. A one-time flat fee of under €100 is often charged for setting up the device, as well.

Monthly or annual fees for using the payment service might also apply. These basic fees vary greatly from one provider to the next, which is why carefully comparing costs can be worthwhile.

Further, transaction fees are charged for every EC card payment. Card providers charge fees to use their cards; the amount—which depends on the card type, among other things—is typically 1-3% of the transaction amount.

Are retailers legally required to offer EC card payments?

In Germany, retailers are generally not legally required to offer EC card payments—they are free to decide which payment methods they want to offer their customers. Nevertheless, offering EC card payments is recommended. Here is an overview of this payment method’s key benefits.

Customer satisfaction

EC card payments offer customers a convenient way to pay for purchases. In an increasingly digital world, customers value the convenience of fast, secure cashless payments. One could say that customers now expect to be able to pay by card in stores—and businesses not offering this payment method might lose potential buyers.

Increased sales

Cash purchases are capped by the amount of money customers carry with them. Card payments remove this limit, allowing customers to spend larger amounts and make spontaneous purchases. This can lead to an increase in a business’s average purchase value and, in turn, its revenue.

Security

When businesses offer cashless payment options, such as EC payments, they reduce the amount of banknotes and coins kept in their places of business. Less cash in a business means less need for secure storage solutions, such as cash drawers and safes. The risk of theft and loss is also reduced, both in the business location and on the way to the bank.

Simplified accounting

EC card payments enable efficient money processing. Transactions are processed in real time and automatically recorded in a business’s accounting system. This reduces the administrative work and error rate associated with manually processing cash payments.