The US company Mastercard will discontinue its Maestro debit card service in Europe. From July 1, 2023, banks and savings banks will no longer be able to issue Maestro cards, Mastercard announced on Tuesday. Cards that are still valid will continue to be supported until the expiry date. If Visa should also discontinue its comparable service, the European financial industry is facing a radical change.
Maestro is an international payment network that enables customers of German banks and savings banks to use their Girocard (formerly “EC card”) as a means of payment and at ATMs abroad. It is a debit card system in which the amounts available are debited directly from the connected account. Mastercard competitor Visa operates a comparable system with V-Pay. The logo of one or the other provider can usually be found on the roughly 100 million German giro cards.
400 million cards
Mastercard wants to switch off the Maestro introduced in 1991 in favor of a more modern system. “Originally created for a physical world”, Maestro cards could not be used consistently for payments in online retail. explains the company. Another reason is that the use of the Maestro card has decreased significantly in recent years. There are still 400 million cards in circulation around the world, but five years ago it was over 650 million.
But Mastercard should also be about strengthening its own Mastercard Debit, which the company recommends as a replacement. The debit card can also be combined with a girocard (in the industry this is called “co-badging”) so that nothing really changes for the account holder. You will receive a new Girocard from your institute. Some savings banks are already testing this. Recently, banks have also started to issue a Mastercard or Visa debit card and dispense with the giro card.
Visa could also discontinue its debit system V-Pay, reports the specialist service finance scene citing industry experts. Visa emphasizes against that HandelsblattTo want to continue to “fully support” V-Pay, however, does not address possible considerations regarding the discontinuation. The obvious: V-Pay only works in Europe. And should Mastercard successfully strengthen its debit card with the discontinuation of Maestro, Visa should also be interested.
Upheaval for the banking industry
This means a radical change for the German banking industry. The Girocard remains a German special route, for international acceptance it has to come to terms with the US giants. The EU believes that the dependency on Visa, Mastercard and new players like Apple and Google is a problem – the mantra of “technological sovereignty” is also decisive for the financial sector.
That is why hopes also rest on the European Payments Initiative (EPI), which was founded last year by financial institutions from six countries with the aim of creating a new European payment standard. EPI is still in the start-up phase, so it will not be available as an alternative in the short term.