Giropay
Encyclopedia
Giropay is an Internet payment System in Germany
, based on online banking
. Introduced in February 2006, this payment method allows customers to buy securely on the Internet using direct online transfers from their bank account. The system is similar to the Dutch iDEAL
payment system, the Interac
Online service in Canada
, pagomiscuentas payment service in Argentina
, and Secure Vault payments in the United States
. giropay is owned by giropay GmbH.
In 2008, the system processed 3.2 million transfers, and the products and services paid with this payment method had a combined worth of 185 million Euros..
Over one million transactions are processed every month.
s (Sparkassen) and cooperative banks are participating in Giropay. However, the number of participating banks from the private sector
is limited. In this sector, the only major participating bank is Deutsche Postbank
. Nevertheless, Giropay has a reach of about 17 million German online banking customers, and about 60% of all commercial bank accounts. That number means the participating banks are serving the vast majority of the German online banking market.
(2FA), such as a challenge-response token
based on the chip embedded in the debit card
or ATM card. Others, however, offer simpler PIN
and TAN
based online banking services. No sensitive information is being shared with the merchant, such as credit card
or Giro
account numbers. There is no chargeback
right however, which can be considered a disadvantage for the consumer using this payment method. This is considered an advantage to the merchants.
Giropay works as follows:
Payments are guaranteed for amounts up to 5000 euros.
payment gateway quotes figures from 1.2% to 0.9%, plus 8c euro per transaction.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, based on online banking
Online banking
Online banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.-Features:...
. Introduced in February 2006, this payment method allows customers to buy securely on the Internet using direct online transfers from their bank account. The system is similar to the Dutch iDEAL
IDEAL
iDEAL is an Internet payment method in the Netherlands, based on online banking. Introduced in 2005, this payment method allows customers to buy securely on the Internet using direct online transfers from their bank account. iDEAL processed 4,5 million transfers in 2006, 15 million transfers in...
payment system, the Interac
Interac
Interac Association is a Canadian organization linking enterprises that have proprietary networks so that they may communicate with each other for the purpose of exchanging electronic financial transactions. The Association was founded in 1984 as a cooperative venture between five financial...
Online service in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, pagomiscuentas payment service in Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, and Secure Vault payments in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. giropay is owned by giropay GmbH.
Transaction Volume
By May 2007 more than 100 million euro in purchases were made.In 2008, the system processed 3.2 million transfers, and the products and services paid with this payment method had a combined worth of 185 million Euros..
Over one million transactions are processed every month.
Scope
Most German savings bankSavings bank
A savings bank is a financial institution whose primary purpose is accepting savings deposits. It may also perform some other functions.In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to...
s (Sparkassen) and cooperative banks are participating in Giropay. However, the number of participating banks from the private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
is limited. In this sector, the only major participating bank is Deutsche Postbank
Deutsche Postbank
Deutsche Postbank AG is a German retail bank with headquarters in Bonn. Postbank was formed from the demerger of the postal savings division of Deutsche Bundespost in 1990. It became a wholly owned subsidiary of Deutsche Post in 1999, and was partially spun out on the Frankfurt Stock Exchange in 2004...
. Nevertheless, Giropay has a reach of about 17 million German online banking customers, and about 60% of all commercial bank accounts. That number means the participating banks are serving the vast majority of the German online banking market.
Process
Giropay offers merchants a real-time payment method (publicized as virtually risk-free) to accept internet payments. For customers, Giropay uses the same environment as their banks' online banking sites. The level of security depends on the participating bank. Some German Banks offer two-factor authenticationTwo-factor authentication
Two-factor authentication is an approach to authentication which requires the presentation of two different kinds of evidence that someone is who they say they are. It is a part of the broader family of multi-factor authentication, which is a defense in depth approach to security...
(2FA), such as a challenge-response token
Token
A token is an object of value, and may refer to:* In logic, computational linguistics, and information retrieval, a token is an instance of a type; see Type-token distinction...
based on the chip embedded in the debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
or ATM card. Others, however, offer simpler PIN
Personal identification number
A personal identification number is a secret numeric password shared between a user and a system that can be used to authenticate the user to the system. Typically, the user is required to provide a non-confidential user identifier or token and a confidential PIN to gain access to the system...
and TAN
Transaction authentication number
A Transaction authentication number, TAN or T.A.N. is used by some online banking services as a form of single use one-time passwords to authorize financial transactions...
based online banking services. No sensitive information is being shared with the merchant, such as credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
or Giro
Giro
A Giro or giro transfer is a payment transfer from one bank account to another bank account and instigated by the payer, not the payee...
account numbers. There is no chargeback
Chargeback
A chargeback is the return of funds to a consumer, forcibly initiated by the consumer's issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account, line of credit, or credit card....
right however, which can be considered a disadvantage for the consumer using this payment method. This is considered an advantage to the merchants.
Giropay works as follows:
- Merchant offers Giropay as payment method, often in addition to the regular credit card payment options
- Consumer selects Giropay and selects his bank
- Consumer is redirected to his bank's login page
- Participating bank displays transaction data
- Customer enters account number, PIN, and either:
- A remittance slip is sent to the customer for confirming the transaction, containing a TAN (transaction number). The customer enters this number to confirm the transaction.
- The customer signs the transaction digitally using a 2FA token (if their bank offers that service)
- Bank authorizes transaction in real-time, deducting the amount directly from the consumer's account (if there is not enough balance, the transaction will be refused)
- Merchant received real-time confirmation of the payment by the bank
- Consumer is redirected back to the merchant page with a confirmation that the payment has been successful
Payments are guaranteed for amounts up to 5000 euros.
Costs
Costs are calculated on a per transaction basis and decrease with transaction volume or value. The NetBanxNetbanx
Netbanx allows merchants and retailers to accept and process Web or call centre captured global payments via credit cards, debit cards, pre-paid cards, and a range of other payment types. The company has locations in the United Kingdom and Canada and has been offering payment services since 1996...
payment gateway quotes figures from 1.2% to 0.9%, plus 8c euro per transaction.
External links
- Giropay site (German only)
- Deutsche Postbank on Giropay (German only)
See also
- Elektronisches LastschriftverfahrenElektronisches LastschriftverfahrenElektronisches Lastschriftverfahren is a form of direct debit transaction that is popular in Germany. It is only used in Germany....
, a German direct debit system - Directebanking.com, a similar German online payment system "with European aspirations"