How do wireless ATMs work

Pay contactless (NFC)

Pay contactless by card

Josefine Lietzau
Expert for banking and credit as of January 10, 2020

Josefine Lietzau

Josefine Lietzau is an editor in the Bank & Investments team. During her studies in German and English, she worked for the editorial offices of the Green League, the Jüdische Zeitung and the Superillu. After completing her master's degree, Josefine Lietzau completed an internship at the online consumer portals Banktip and Posttip, where she then worked as an editor.

  • New credit cards and girocards are equipped with Near Field Communication (NFC). You can use it to pay without having to give the card out of your hand.
  • It is possible to read data from the NFC cards using smartphones.
  • If a card is stolen, third parties can use it to spend small sums until the card is blocked, as neither a PIN nor a signature are required to pay. As a rule, you are not liable for this.
  • Check whether your credit card or Girocard (EC card) is NFC-enabled. You can recognize this by the wave symbol on the map.
  • You can only pay contactless in the store if the retailer offers this option. You can also recognize this by the wave symbol, which is usually attached near the payment terminal.
  • Paying with NFC is easy: you hold your card or smartphone up to the payment terminal for a moment.

The queue at the checkout is long, one customer after the other rummaging through the change. In situations like this, many who are further back in the queue wish that at least that Pay faster would go. Technically it works: Near Field Communication (NFC) make it possible.

What is Near Field Communication (NFC)?

Behind NFC is a transmission standard that has long been part of the basic equipment of smartphones. It is used for the contactless exchange of data over a short distance, usually a maximum of four centimeters. This can be used, for example, to connect a cell phone to a wireless loudspeaker. But you can also pay with it.

If the retailer's cash register is equipped with the radio standard, customers need theirs to pay via NFCCard or mobile phone only to the cash register terminal hold. You don't have to give the card out of your hand or insert it into a reader, in some cases you don't even need to enter the PIN. This makes it quicker and more convenient to pay than with cash.

How does paying with NFC work for Girocards?

Since 2012, customers have been able to use NFC to pay with their Girocard (formerly: EC card). They have been around since thenGirogo prepaid payment optionthat works with the radio standard. A card is ready for this payment method if it bears one of three logos: the Girogo logo, the contactless logo of the Sparkassen or the Geldkarte logo of the Volks- und Raiffeisenbanken (see illustration). The acceptance points include retailers and supermarkets such as DM, Edeka and Netto. The logos are stuck to their cash registers.

Logos for contactless payment

Customers first have to load money onto the NFC chip in order to be able to pay with the NFC function of the Girogo card, as the function does not access the credit on the current account. This can be done, for example, via an ATM or when shopping at one of the participating retailers. The banks also offer a kind of subscription: Then the card automatically loaded with credit when payingif the money on the chip is not enough for the purchase. Basically, the credit on the chip is limited to 200 euros.

Some of the banks are now issuing NFC-enabled girocards that without charging of the chip: "Girocard contactless". With these cards you can pay contactless and without a PIN if the amount is less than 25 euros. If it is more than 25 euros, the PIN is required. There are now 18 million such cards in circulation, and by 2020 there should be 75 million. At Aldi, Lidl and Kaufland, for example, consumers can use their cards to pay via NFC.

In the security Similar rules apply to Girogo and Girocard contactless: To debit, the employee at the checkout must activate the payment by entering it. This is to prevent consumers from accidentally paying in passing or multiple times. Girogo also sets a maximum amount of 20 euros per payment when paying.

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How does paying with NFC work for credit cards?

Many credit cards also have an NFC function. With Visa the whole thing is called “Paywave”, with Mastercard “Paypass” and with American Express “Expresspay”. You can usually tell whether your card is NFC-enabled by the radio symbol printed on it (see illustration).

NFC logo on credit cards

If you shop for less than 25 euros (Mastercard) or 50 euros (Visa), you also need NFC credit cards no PIN. Some merchants have lowered the limit for Visa cards to 25 euros. For higher sums, you have to prove your identity, either with the PIN or a signature. It is not necessary for the card to be loaded with credit.

Payment is made in the same way as with giro cards: customers hold the card up to the till, the till confirms the payment with an optical or acoustic signal. Unwanted or multiple payments should not be possible according to the card company. During the payment process, the card number, expiry date and amount are exchanged with the payment terminal.

How does paying with NFC work on smartphones?

With "mobile payment", that is mobile payment with the smartphone, hasn't been much going on in Germany for a long time. There were too many suppliers on the market and too little interest on the part of consumers. So many providers gave up.

The topic has been in motion again since summer 2018. Because the payment system has been around since then Google Pay of the American corporation also in Germany. In the beginning only a few banks took part, but the circle has now expanded. For example, customers of Comdirect, DKB and ING can use Google Pay.

The customers of the Savings banks and Volksbanks can now pay on the go. To this end, the banks developed their own apps, the Sparkasse app and the VR banking app. It works with a girocard and credit card. However, if customers have an iPhone, they cannot use this app. However, the savings banks now offer Apple Pay.

Apple Pay has arrived on the German market since December 2018. As with Google Pay, only a few banks initially offered the service, but the number is growing. Participating banks are, for example, Deutsche Bank, DKB and Hanseatic Bank.

So far, Google Pay and Apple Pay only work with credit cards.

Data protection: which data can be read out?

Some dates may vary depending on the card type easily read , for example via a smartphone with the appropriate app.

Reading works, for example, with the Girogo cards. They show the remaining amount on the card, but also the last three loading transactions and the last 15 transactions. Dealer, location and products are not saved. So it is not really sensitive data. This function is intended to make it easier for consumers to keep track of their expenses. If you don't want that, you can have the NFC function deactivated.

According to the savings banks, the NFC chip stores no information on normal payment with the card or by withdrawing money from ATMs.

According to information from the Deutsche Kreditwirtschaft, past transactions with Girocard contactless cards cannot be read out via NFC. However, the individual banks decide what exactly is stored on the chip.

Whether consumers can easily read the data on credit cards depends on the card. There are cards for which it is sufficient to hold a smartphone with the appropriate app close to the card to obtain data on the last ten transactions. In 2016 it came out that this is how Number26, Miles and More and Fidor credit cards work.

The total, date and currency of the payment process are displayed, but not the place of purchase or other details. Data on the card itself can also be viewed, for example card number and expiry date. The customer's address and the card verification number (CVC number) are not saved in this way. At Miles and More, the data can no longer be read out in this way.

According to the providers, there is no security risk for customers: it is not possible to have a functioning data Duplicate credit card to create. If this information is important to you, either ask the bank or check your credit card with your Android smartphone and a suitable app.

If someone reads the data from someone else's credit card: In most online shops, the information would not be enough to make purchases. In the meantime, retailers ask for the check digit or the so-called 3-D-Secure procedure takes effect: This is a security standard in which customers have to enter a password when shopping. Mastercard offers the procedure under the "Mastercard Secure Code", while Visa is called "Verified by Visa".

How secure are NFC-enabled cards?

Girogo card

According to the savings banks, the cash card and the Girogo card are based on the same security standard. The electronic cash card, which was introduced in 1996, has not suffered any damage in 20 years. Customers can also use this to pay without a PIN, but they have to insert the card into a payment terminal.

There is always a risk: Theft or loss. Because in these cases, third parties can use the card and use up the money. The banks are not replacing it. If customers use the automatic loading method, the banks only deactivate it when the customer has the card blocked. It is important to note: some savings banks activate subscription loading automatically after they issue the card.

Girocard

With the contactless Girocard, thieves could not only access the loaded credit, but also the current account. If the card is lost or stolen, you usually have to pay up to 50 euros until the card is blocked. The prerequisite is that you block the card immediately after you notice the loss.

However, the banks are often liable for payments under 25 euros with NFC. According to the German banking industry, it makes no difference in terms of security whether customers pay contactless via Girocard or put the card in the till. However, the banks can offer different protection options. This includes, for example, that the customers Switch off the NFC function or receive a card without NFC functionality. Another option would be for banks to give their customers one free of charge NFC case offer, with which the card is shielded.

Credit card

Customers are also liable for up to one credit card loss or theft Maximum limit of 50 eurosuntil they block the card. Some banks exempt their customers from this. In addition, Mastercard and Visa have a “Zero Liability Policy” that exempts customers from liability if they have not acted with gross negligence. In any case, you should have the card blocked immediately, regardless of whether it is a debit or credit card. You can do this via the telephone number 116 116, which is free in Germany.

Always check the card transactions

In addition to loss and theft, there is theoretically another risk with NFC cards: the cards could be spied on via radio. Two security researchers showed how this works in 2015 at the “Hack in the Box” security conference. The hackers paid via a so-called relay attack with a third-party NFC credit card. To do this, the researchers installed malware on the victim's Android cell phone. As soon as the victim placed his NFC credit card very close to the cell phone, the malware passed the signal on to the hackers. However, it is questionable how often such attacks can succeed outside of hacker conferences and laboratory conditions.

Basically, however, the advice applies: Check the sales of your credit cards regularlyto reduce the risk of data theft. After all, criminals often get credit card data by hacking into the database of an online shop, for example. Such information is resold or the hackers use it themselves to shop at the expense of consumers.

More on this in the current account guide

  • With the right checking account, you can save on fees and get good benefits.
  • Good accounts: DKB, ING

To the advisor

Josefine Lietzau

Josefine Lietzau

Josefine Lietzau is an editor in the Bank & Investments team. During her studies in German and English, she worked for the editorial offices of the Green League, the Jüdische Zeitung and the Superillu. After completing her master's degree, Josefine Lietzau completed an internship at the online consumer portals Banktip and Posttip, where she then worked as an editor.

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