The German banking industry committee, Deutsche Kreditwirtschaft, is going to commence a contactless prepaid card pilot in the cities of Hannover, Braunschweig and Wolfsburg in mid-April.
A spokesperson for the Committee told Cards International that more than 1.3m cards will be eligible for contactless payments of under 20 as of mid-April. The prepaid card can be preloaded with up to 200 and select retailers will offer top-ups in stores.
The card can also be signed up for automatic preloading.
The pilot will go on for a year and the Committee is considering enabling girocards (debit cards) with a contactless option in the medium term as well.
This is the first time a contactless pilot is not taking place at a football stadium. The Committee has signed up, among others, food retailer Edeka, petrol retailer Esso, perfume chain Douglas, fashion retailer AppelrathCüpper und confectionary business Hussel.
Edeka has been using contactless terminals since 10 January this year across 100 stores in Hannover, Braunschweig and Wolfsburg. It plans to raise the number of stores that accept contactless payments to 250 by the end of May.
The German card market has been growing steadily over the past few years and 2010 the most recent period that data is available for has recorded the highest growth in history, German consultancy PaySys found.
Card turnover rose by 11.7% in the twelve months to the end of 2010 to 238bn and the CAGR for card sales was 9.25% for the five years to 2010.
Despite industry-wide belief that Germany is a debit-dominated market, the PaySys data shows that the CAGR rate for credit cards was10% – just marginally higher than for debit cards (9.8%) between 2005 and 2010.