Sparkasse trials contactless payment

Sparkasse has become the first German bank to trial contactless credit-card payment. Unveiled this week, the bank’s “Girogo” Kontaktlos system is similar to touch-free payment systems already used in selected areas of the UK and US.

Using the RFID (radio frequency identification) system to transmit data from a small chip on a bank card users can simply swipe their card over a receiver to automatically pay for everyday goods.
Because there’s no PIN or signature used, there’s a restriction of €20 on a single spend, but it’s hoped that the new system will cut down on handling costs and encourage consumers to spend more.

Hannover, Braunschweig and Wolfsburg will be the first locations for the trial, which begins in April, with more than 1.3m customers being issued with new bank cards complete with an RFID chip. They will then be able to swipe and pay at outlets such as Thalia and Esso.

Many banks and shops in the US and UK, such as Barclays, HSBC, Citibank and American Express have already adopted this system in urban areas, although there are doubts as to whether security issues and the comparative lack of credit card use in Germany may affect its popularity.

Rival systems such from MasterCard and Visa’s “payWave” system, which is being adopted by BW-Bank, DKN and TargoBank, are also expected to come to the German market this year. Let the battle of the swipe systems commence.