An interesting experience in Munich


#1

Using the card in Munich was an unique more like a bizarre experience. I was warned by my friend that many places doesn’t accept card payment. Low and behold my friend warning came into truth. I went to the local grocery to buy some food and the card was not accepted. I had to use cash; Again I tried to purchase a travel ticket at the ticket machine. denied :no_good_woman:t5:

On the other hand some places did accept the Revolut card, like McDonald’s and Aldi. Of course I learned to that cash was a ‘better’ option. Plus the cash machines did not charge a withdrawal fee :ok_woman:t5::+1:t5:.

My advice for anyone who is planning to travel to Munich is that don’t be surprised about card payment rejections. Also noticed that contactless payment is not common in Munich. If anyone know why Munich’s efinance infrastructure is not par with the UK, please let me know.

Here’s list of ATM’s that has free cash withdrawals:
Stadtsparkasse
Reiseb
P. S. When withdrawing money select an option to not apply foreign exchange rate. Otherwise the value of your foreign money will go down.


#2

That’s true… welcome to Germany. Comparably, of course.

Other major international card wouldn’t have been any better than Revolut- many places still only accept local / EC branded cards. Mastercard and Visa are ignored. Cash is king. Somewhat surprising but true.


#3

Well, the “problem” you might have encountered is that Germany has a national card payment system called Girocard which is way cheaper for merchants than MasterCard/Visa. Almost all banks offer this card at no extra cost to their customers. Girocard’s market share in Germany is huge.

And since Girocard is Chip/TAN based since ever, most terminals are Chip/TAN based for a long time and already capable of handling all modern cards. But small businesses don’t upgrade to contactless. Grocery stores, drugstores like DM or fast food chains have updated already because these businesses profit most from contactless payments.


#4

It’s not only Munich, it’s all Germany looks like you wrote. Using MC/Visa card in Germany is still a lottery. Major shops like Aldi, Lidl, Rosmann are accepting cards, but local shops usually accepts only cash.


#5

Strange how N26 is based in Germany when most of the country is quite backwards in terms of basic digital financial services.


#6

Make sense now, after doing a little bit of research. But I think Girocard needs to accepts MasterCard or MasterCard need reduce their fees because it’s quite shocking that Germany (largest economies in the EU).


#7

The infrastructure for card payments in Germany is quite old, but not really backwards. They had a national card payment system when UK and France still used paper checks a lot :slight_smile: Also, direct debit is quite popular. One can use direct debit to pay in a lot of stores. This is the cheapest way for merchants to offer electronic payments. Credit cards are not that popular here because they are more expensive (yearly fees) and don’t offer many (or any) benefits to your average bank card that one get’s for free with every bank account.

And since Germany is a relatively large market, a competing system to the (newer and more expensive) credit card schemes makes sense for German banks that operate Girocard as a joint venture. The number of MC/Visa cards in Germany is relatively low. It seems hard to change an established and popular system that runs for a long time now, especially if the side effect is higher costs for everyone involved.

Girocards are usually co-branded with Maestro. Maestro acceptance is a little bit higher than Mastercard/Visa.


#8

Thing is, whilst a basic, functional version of a digital cards-based payments system exists in Germany, the fact that it doesn’t incorporate the common international standards (VISA, MasterCard.) makes it backwards.

Just because a country has a 1900s-style coal-powered train (in the era of high speed rail.) doesn’t mean that it’s not backwards. :wink:

I understand the concerns of credit cards, and the favouring of debit cards over credit cards (Lower fees for merchants, risk of going into debt if the debt is not paid off, consumerist temptations, …), but the merchant terminal systems, and financial infrastructure (VISA, MC) is the same for both debit cards and credit cards.

I’ve heard a lot about Maestro from the Belgium users on this message board. Systems like Girocard and Maestro are legacy systems that belong in a museum.


#9

The point is that the merchants have decided not to support MC/Visa, because of the higher costs. And this now slowly changes after the EU regulation for merchant fees is in place. All terminals that support Girocard are Chip/PIN terminals (Girocard is a Chip/PIN only standard) so there is no limitation here in the installed POS terminal base.

Three things: the merchant fees for debit cards are max. 0.2% now. But that is not what big department stores and grocery stores like Aldi are paying. They negotiate the merchant fees differently and end up with much lower fees for Girocard acceptance. They don’t pay much at all. It is true that Girocard is a little bit behind in technology in some points (live notifications), but that is about it. Girocard is now also contactless and can also virtually run on a smartphone and it is a perfectly running and very reliable system.

Second: the electronic direct debit system. This is not part of the Girocard brand. But the data encoded on Girocard branded bank cards is used to transmit bank account details to a merchant who then can withdraw the amount for a one time payment as a SEPA direct debit transaction. This is even cheaper for merchants, yet more risky, because customers can return the payment like with any SEPA direct debit. Sometimes you end up with a merchant that only offers this option and then even Maestro cards are not accepted.

And third: Germans like to pay with cash. Its weird. I don’t get it. But its a fact that a majority of customers still prefers this.

It is not just about old vs. new here. It is about different players and standards in a market that compete with each other. And since Girocard is by far the one with the biggest market share here, it is not going anywhere very soon.

To be clear, I am not a fan of the Girocard system. The irony is that its wide adoption and good performance makes it hard for competing players here to gain market share. And the banks who could focus on selling their customers MC/Visa debit cards with slightly more functionality, have little to no interest because they are the ones running the Girocard system.