The Bundeskartellamt has no objections to the further development of the giropay payment system envisaged by Deutsche Kreditwirtschaft (German Banking Industry Committee). The parties to the cooperation had stated that they were prepared to give up their plans for an exclusivity agreement regarding the joint project, which was originally part of the development project.

In 2020, the Bundeskartellamt had already examined the combination of the giropay, paydirekt and Kwitt systems under the joint brand name giropay. In a second step the role of the joint venture paydirekt GmbH as the central provider of the giropay payment system is now to be strengthened. paydirekt GmbH is to set up the contracts and fees required for participating in the giropay system, which involves a centralised pricing scheme. In addition, the company is to enable customers to use the digital girocard for authorising payments made via giropay and is planned to obtain the relevant approval for this purpose within the girocard system.

Andreas Mundt, President of the Bundeskartellamt: “From a competition point of view the centralised structure of the giropay business model does not raise any concerns. As an online payment system giropay competes with powerful service providers such as paypal, VISA or MasterCard.”

The parties to the cooperation originally planned to have their substantial investment in giropay secured by an exclusivity agreement. As this could have restricted competition in innovation the Bundeskartellamt had expressed concerns about the project.

Andreas Mundt, President of the Bundeskartellamt: “Economic progress is largely driven by innovation and market entries. Established payment systems, large digital companies and also FinTechs continuously work to develop new or improved solutions for digital payments. What we see as a simple e-wallet design today can tomorrow develop into a comprehensive payment system with a broad range of functions. Some of giropay’s competitors might have to rely on cooperation partners from the German banking industry for entering the German market or expanding the functions they offer. Refraining from using an exclusivity clause ensures that such innovations are not impeded by a self-imposed commitment undertaken by Deutsche Kreditwirtschaft as a whole, which would be problematic in terms of competition law.”

Background:

The four banking associations Bundesverband deutscher Banken, Bundesverband der Deutschen Volksbanken und Raiffeisenbanken, Deutscher Sparkassen- und Giroverband and Bundesverband Öffentlicher Banken Deutschlands are working together with Commerzbank AG, DZ Bank AG, Deutsche Bank AG, GIZS GmbH & Co. KG, Fiducia & GAD IT AG, Bank-Verlag GmbH, S-Payment GmbH and paydirekt GmbH to standardise the payment solutions of Deutsche Kreditwirtschaft. The aim is to offer a standard product to cover the various payment channels. This project is known to the general public as “#DK” or “DK-Pay”. The project is to be implemented in partial stages.

In a first step the Bundeskartellamt had already examined the combination of the e-commerce payment services paydirekt, giropay and Kwitt (see press release of 17 December 2020). paydirekt and giropay are now offered under the uniform, redesigned giropay brand controlled by paydirekt GmbH. paydirekt GmbH is a joint venture of DZ BANK, GIZS, Commerzbank and Deutsche Bank.

The “girocard” (formerly known as “ec-Karte”) is Germany’s most widely used payment card in brick-and-mortar retail stores. The girocard system is based on an agreement concluded by Deutsche Kreditwirtschaft. A digital version of the girocard has also been available since 2019. In order to be able to use the ‘digital’ girocard for payments via smartphone, for example, customers need to contact the bank managing their account to have this function activated in a separate process.