Modes of Payment With Electronic Cash Debit Cards
Many retailers provide the option of paying by card or electronic cash, as both payment systems include a guarantee of payment. The electronic direct debit (EDD) system offers no such guarantee and thus exposes the retailer to a default risk.
- In 2005, 13.1% of all payments in Germany were made using electronic cash (payments included the entering of the PIN). In 2009, the percentage of payments using electronic cash went up to 19.4%; payments amounted to 71 billion euros.
- The electronic purse card or Geldkarte can also be used for payments. With an annual turnover of 0.1 billion euros its market share amounts to less than 0.04%.
- ELV (Elektronisches Lastschriftverfahren, electronic debit advice procedure) online or offline. 12% of 2005 turnover in commerce was processed using this method. The market share in 2009 was 12.2%, or 45 billion euros. The technology was introduced in 1984. When using ELV online (also called OLV) every online payment is checked against a credit rating score and a nationwide blacklist. When ELV takes place offline, there is no telephone line and no checking. It is the most inexpensive method for retailers. All procedures read only the account number, the bank code and the card number from the magnetic stripe or the chip. In contrast to the electronic cash method the customer authorises a direct withdrawal with his signature.
- POZ (Point of Sale ohne Zahlungsgarantie, point of sale without payment guarantee). Unlike OLV and ELV, which are procedures used in retail, POZ was a procedure used by the ZKA (Zentraler Kreditausschuss, the German Central Credit Committee) from its introduction in 1994 up to its abolition on December 31, 2006.
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