Giropay is an Internet payment System in Germany, based on

online banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial inst ...

. 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 may refer to: Philosophy * Ideal (ethics), values that one actively pursues as goals * Platonic ideal, a philosophical idea of trueness of form, associated with Plato Mathematics * Ideal (ring theory), special subsets of a ring considere ...

payment system,

MyBank EBA Clearing is a provider of pan-European payment infrastructure wholly owned by shareholders that consist of major European banks. It owns and operates major payment infrastructure in Europe for Euro payments between banks. This includes EURO1 ...

payment system, the

Interac Interac is a Canadian interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac serves as the Canadian debit card system and the predominant funds tra ...

online service in Canada
pagomiscuentas
payment service in Argentina, and Secure Vault Payments in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

. Giropay was owned by giropay GmbH until December 2020, when it was acquired by paydirekt. The two began a merger in May 2021.

Transaction volume

By May 2007, more than 100 million euro in purchases had been made.''Explanation of Payment Systems'', PDF document distributed by NetBanx In 2008, the system processed 3.2 million transfers, with the transactions made totalling 185 million Euros. Over one million such transactions are processed every month.

Scope

Most German Sparkassen and cooperative banks are participating in Giropay. However, the number of participating banks from the

private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The ...

is limited. In this sector, the only major participating bank is

Deutsche Postbank Postbank is the retail banking division of Deutsche Bank, which was formed from the demerger of the postal savings division of Deutsche Bundespost in 1990. Since May 2018, it operates as a brand of Deutsche Bank's retail arm. It serves 13 million ...

. 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 authentication Multi-factor authentication (MFA; encompassing two-factor authentication, or 2FA, along with similar terms) is an electronic authentication method in which a user is granted access to a website or application only after successfully presenting ...

(2FA), such as a challenge–response

access token In computer systems, an access token contains the security credentials for a login session and identifies the user, the user's groups, the user's privileges, and, in some cases, a particular application. In some instances, one may be asked to ente ...

based on the chip embedded in the

debit card A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but u ...

or ATM card. Others, however, offer simpler

PIN A pin is a device used for fastening objects or material together. Pin or PIN may also refer to: Computers and technology * Personal identification number (PIN), to access a secured system ** PIN pad, a PIN entry device * PIN, a former Dutch de ...

and

TAN Tan or TAN may refer to: Businesses and organisations * Black and Tans, a nickname for British special constables during the Irish War of Independence. By extension "Tans" can now also colloquially refer to English or British people in general, es ...

based online banking services. No sensitive information is being shared with the merchant, such as

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

Giro Giro or GIRO may refer to: Banking and Investments * Giro (banking), a direct payment from one bank account to another instigated by the payer * Girobank, a state owned and later privatised financial institution in the UK * GiroBank, a Danish ba ...

account numbers. There is no

chargeback A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit ca ...

right however, which can be considered a disadvantage for the consumer using this payment method. This is considered an advantage to the merchants.{{Citation needed, date=April 2020 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 their bank # Consumer is redirected to their 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 Multi-factor authentication (MFA; encompassing two-factor authentication, or 2FA, along with similar terms) is an electronic authentication method in which a user is granted access to a website or application only after successfully presenting ...

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 NetBanx payment gateway quotes figures from 1.2% to 0.9%, plus 0.08 € per transaction.

References

E-commerce in Germany Payment service providers Online banking Banking in Germany

Transaction volume

Scope

Process

Costs

See also

References