Credit card

from Wikipedia, the free encyclopedia
Credit cards

A credit card ( loan translation from the English credit card developed in the second half of the 20th century ) is a card used to pay for goods and services. Most credit cards can be used worldwide, both in real daily business and private life and for online money transactions. In the case of Mastercard or Visa, it is issued by banks in cooperation with the credit card organizations, or - in the case of Diners and American Express  - directly by the card company. These four companies share almost the entire European credit card market. The name credit card originated from the fact that credit cards often provide credit to the cardholder .

36 percent of Germans have a credit card, and the trend is slowly increasing.

history

The first credit cards

The term credit card was first mentioned in 1888 in the science fiction novel A Review from 2000 to 1887 by Edward Bellamy .

The credit card idea originally came from the USA, where credit cards have been around since 1894. The first were given to good guests by hotels. In the 1920s, oil companies and department store companies followed, other industries such as restaurant chains and airlines did not begin until after 1945. These customer credit cards - today special credit cards (Proprietary Credit Cards) - enable credit purchases, performance now / payment later, exclusively with the company that issued them. They should facilitate payment and consolidate brand or company loyalty.

Real credit cards - general purpose credit cards - came a little later, again in the United States. These are issued to consumers with the appropriate creditworthiness and can not only be used for payment by one company, but also by everyone who has concluded an acceptance contract for the respective credit card. The first such universal credit card was that of the Diners Club , which was founded as a club in February 1950. As the name suggests, it should initially only be used by the club members - friends and acquaintances of the two founders Frank McNamara and Ralph Schneider  - in around two dozen selected New York restaurants for dining on credit. But the narrow definition of target groups as well as industry and country boundaries were soon overcome. The next universal credit card in August 1951 was that of the Franklin National Bank at Rockville Center on Long Island, New York State. The primary aim here was to push the consumer credit business and make it easier to administer.

The further development

Ever since these credit cards were issued, a distinction has been made between travel & entertainment credit cards, which were initiated by Diners Club, and bank credit cards, which were created by Franklin National Bank.

Travel & entertainment credit cards, corporate credit cards

Travel & entertainment credit cards as well as company credit cards are primarily geared towards the needs of frequent business and private travelers. They should enable them to make cashless payments worldwide, especially in the travel industry - in hotels, restaurants, with rental car companies and airlines. The international distribution of the contractors was therefore typical for this type of card. A (relatively high) annual fee is charged for travel & entertainment credit cards. The monthly invoice is usually paid immediately upon receipt.

Diners Club remained the only one on the market in this business area for years and was therefore able to expand rapidly without competition. Initially this expansion was only aimed at the USA, but soon it was extended to other countries as well. This was done by franchisees , who usually both issue cards and acquire contractual partners. The Diners Club Great Britain was founded as early as 1952, making Diners Club the first internationally applicable credit card. In 1954 Diners Clubs followed in France and Spain, 1955 in Mexico, 1956 in Switzerland, Germany, Australia and Brazil, 1957 in the Benelux countries and 1958 in Italy. Today Diners Club is represented in almost every country in the world.

The American Express Card was added to the Diners Club card on October 1, 1958 as the second travel & entertainment credit card for wealthy customers . Before the credit card business began, American Express was known around the world as a traveler's check issuer and travel agency . One reason for entering the credit card business was the feared competition from American Express traveller's checks: Loss of sales on traveller's checks should be offset by sales gains on credit cards and, if possible, overcompensated. Thanks to professional preparation, the high level of awareness and the preparation of the market by Diners Club in previous years, American Express was very successful in the credit card business in a short time. After three months of business activity, by the end of 1958 there were already around 32,000 contractors and around 475,000 cards. From the very beginning, American Express was internationally active in both card issuance and contract partner acquisition. Soon Diners Club was overtaken according to card, contractual partner and sales figures. In contrast to Diners Club, the international expansion was not carried out by franchisees, but by its own subsidiaries or branches.

Bank credit cards

The basic idea of ​​bank credit cards is primarily geared towards the consumer credit business . Such credit cards are usually provided with a revolving credit , with the issuing bank charging interest on the loan for the amount that has not been covered within a specified period. There were initially only contractors in the local or regional catchment area of ​​the issuing bank.

Rockville Center's Franklin National Bank did not stay alone with its bank credit card for long. Many banks followed the banking landscape that was even more fragmented than it is today. In 1958, Bank of America joined with its BankAmericard and in 1959, Chase Manhattan Bank with its Bank Charge Card. In 1968, one in ten US banks had a credit card program, but the limited area of ​​acceptance was unsatisfactory. The validity of bank credit cards was extended with several interchange agreements - initially national, later internationally - from which the MasterCard and Visa organizations ultimately developed.

After the mass mailing of credit cards by post in the USA without checking the creditworthiness of the addressees had brought the trustworthiness of cashless payments into disrepute, the government introduced several laws between 1968 and 1974 that prevented the proliferation, not least of all, of the many cases of fraud , should contain. The Truth in Lending Act (1968) and the Fair Credit Reporting Act (1970) played a central role ; Both regulations obliged the banks to be more transparent when issuing and handling credit cards.

The MasterCard is one of the two major bank credit cards that began in 1966 when several regional US bank credit card associations were merged to form the Interbank Card Association. As a result, a large number of banks from all over the country joined them. But rapid internationalization also followed. In 1968, for example, a cooperation agreement with Eurocard International, a company of European banks, ensured that cards were issued and accepted in Europe. In 1981 the name was changed to MasterCard International. The credit card system is now represented on all continents - in Europe due to an Alliance Agreement by Europay International, the successor organization to Eurocard International.

The Visa credit card has its origins in BankAmericard, which was first issued by Bank of America in 1958. From 1966 on, this gave license agreements to other banks in the USA and in other countries. In the same year, Barclays became the first European bank to issue a credit card with the Barclaycard . In the same year, payment by Barclaycard was set up at around 30,000 contact points.

In 1970 the Visa credit card became independent nationally and in 1974 internationally under the name Ibanco, with all member banks represented. In 1977 Ibanco adopted the Visa name for all cards and activities.

Both MasterCard International and Visa International are no longer purely bank credit card organizations, but are also active in debit cards (Maestro / MasterMoney / MasterCard Electronic or Interlink / VisaCheck / Visa Electron / Plus / V PAY) and ATMs (Cirrus / Plus).

The JCB Card was added relatively late to the global credit card organizations. In 1981 this credit card organization, which until then had only been active in Japan, decided to operate internationally with more than 4 million credit cards and over 300,000 contract partners. In 1982, JCB began gradually expanding its network of contract partners outside of Japan. The first contractual partners - following the Japanese tourists - were acquired in Singapore, Hong Kong, Taiwan and Hawaii. After that, card issuing activities were started - in some cases with partner banks - in those countries where many Japanese live. Today JCB is represented all over the world, but in most countries only with contractual partners where Japanese customers make payments relatively frequently.

German credit card (DKK)

At the end of 1988, the Main Association of German Retailers (HDE) and the German Hotel and Restaurant Association (DEHOGA) jointly planned to issue a German credit card (DKK) in the Federal Republic of Germany in order to avoid the high billing costs (sales commission up to 5 percent) of established credit cards. The card was originally supposed to cost 60 Deutsche Mark . The approximately 10,000 contract companies that joined the DKK organization in mid-1988 agreed a sales commission of just 2.75 percent. The Munich Higher Regional Court forbade the designation, however, as the court was of the opinion that the company was not big enough to use the term “German” in its name.

Alignment

As far as the formerly large differences between travel & entertainment credit cards and bank credit cards are concerned, these have largely been leveled out over time and the distinction has become almost obsolete. All universal credit cards are now represented worldwide - as shown - and bring credit cards with revolving credit to the market for customer needs.

Right from the start there was intense competition for cardholders and contractual partners between the credit cards on the market. This also had the consequence that all credit cards soon had to become international, as otherwise they would have shown a competitive disadvantage compared to the competition. However, since internationally applicable credit cards, due to the growing tourism and the increasing globalization of the economy, found a gap in the market, all credit card organizations were able to gain a foothold and expand more or less quickly.

The competition did not only take place between the credit card organizations, but increasingly between the individual financial institutions that wanted to retain their customers with credit cards.

All of this meant that the number of credit cards that could be used internationally grew rapidly. While there were only 1.2 million international credit cards in circulation in 1958, the 100 million threshold was exceeded in 1975, the 500 million threshold in 1991, the 1 billion threshold in 1997 and the 2 billion threshold in 2004.

Even though the T&E credit cards first appeared on the international market, they were already outnumbered by bank credit cards at the beginning of the internationality of bank credit cards. Since then, the gap between the two types of cards has steadily widened, both in absolute numbers and in percentages.

By means of a license and franchise policy, the two bank credit card organizations MasterCard and Visa quickly established themselves first in the USA and, starting in 1968, with Canada, Mexico and Europe also on the other continents. Today almost every financial institution active in the private customer business issues credit cards from one of the two credit card organizations or from both credit card organizations according to its strategy.

In parallel to the issuing competition, the competition between the card-issuing financial institutions, the acquiring competition, the competition between the contractual partner-clearing financial institutions, takes place in the credit card business. Although not as stormy as the development of the number of cards, the number of contractual partners has increased continuously. In 1958 there were just 40,000 contractual partners who accepted American Express and / or Diners Club cards, in 2003 there were over 22 million for MasterCard and Visa cards, and around 9 million for American Express -, Diners Club and JCB cards, and about 4 million that accepted Discover cards.

Product range

Then as now, the type of product offered differs from country to country and has changed over time.

So z. B. With credit cards in addition to the payment and cash withdrawal function in countries where there is no convenient personal loan option, especially for short-term financial bottlenecks, revolving loans are offered (e.g. USA, Great Britain, Australia). In other countries where this possibility of short-term fundraising z. If , for example, there is an overdraft in the current account (especially in Germany), this aspect of credit cards is less important, but is becoming more common.

While there was initially only one credit card, the product range has been refined over the years. The credit card is now available almost everywhere as a Classic Card with a standard range of product features, the Gold Card with special additional services and the Business Card as a credit card at the expense of the co-applying company, mostly with special accounting functions. Recently, there have also been “Above Gold Cards”, which mostly appear as Platinum Cards and which usually require an income of around 100,000 US dollars.

American Express finally launched the Centurion Card to display elitist belonging. Mastercard followed with World Signia, which is reserved for top customers and is only available at the invitation of the issuing bank. Visa currently offers Visa Infinite as the highest customer level. Customers can expect very high annual fees, but also - especially for frequent travelers - exclusive privileges. Room upgrades in the best hotel chains and other amenities are included with the Amex Platinum. Most of these premium cards include the Priority Pass with unlimited single entries in over 600 airport lounges. And finally there are the corporate cards , which are issued to employees of large companies with their own accounting modalities.

In cooperation with non-banks, the card-issuing financial institutions have continued to issue affinity cards and co-branding cards since the late 1980s , most of which have appropriately adapted card features and a special card design tailored to the affinity or co-branding partner. As an example of today's co-branding cards, Deutsche Kreditbank AG, in cooperation with Lufthansa, is issuing the Lufthansa credit card - Lufthansa Miles & More Credit Card. In addition to travel-related additional services (e.g. insurance, special conditions), this offers a mileage earning function (1 euro turnover = 0.5 miles) in the Lufthansa customer loyalty program Miles & More .

Due to the contemporary products and intense competition, the credit card business has taken on enormous proportions. In 2003, the almost 2 billion credit cards of the five internationally active credit card organizations were used over 57 billion times. The volume billed to cardholders in 1999 was $ 4,744 billion.

The credit card business has become more international over the years. Until 1990, the USA was the country in which the majority of internationally applicable credit cards were issued. Only since 1991 have there been more such credit cards outside the US than inside. However, the sales volume outside the USA had already exceeded that in the USA in 1988.

The successful spread of the credit card business and its increased economic weight have increasingly shown negative effects: Consumers believe they are more prosperous than they actually are; the effective savings rate falls due to increased consumer spending.

Technical development

In parallel with the increasing number of cards and contract partners as well as increasing transaction and turnover figures, the processing of the credit card business was gradually automated. At the contractual partners this was done by installing credit card-accepting POS terminals and for in-house operations by using the most modern hardware and software.

Both the POS terminals and the internal data processing systems have not only contributed to more efficient processing of the transactions, but also raised the level of security, which is of particular importance in an international retail payment system. The next step here will be to equip the credit cards with a chip based on EMV specifications. Combined with EMV-capable POS terminals, forging credit cards should then no longer be possible. This can then be the basis for credit cards to switch from transactions based on signature to transactions based on PIN.

Visa CodeSure card

In August 2010 Visa Europe started a pilot project in Germany together with the Deutsche Kreditbank (DKB) to introduce the Visa CodeSure card , which has a random security code that is generated via a keypad on the card.

A further development are the so-called radio cards, which enable payments to be made “in passing” using the local radio NFC method . Visa calls this technology Pay Wave , Mastercard Pay Pass . The cards came under fire because they can be read out unnoticed with NFC-enabled mobile devices .

term

The term credit card is not used uniformly internationally. In the German-speaking countries, this means both real credit cards and charge cards , daily charge cards , check or debit cards and prepaid cards (for the respective terms see below ). In general, only those debit and prepaid cards are considered to be credit cards that have the acceptance mark of one of the credit card organizations and are therefore accepted wherever real credit cards and charge cards can be used for payment. In contrast, the term is used differently in other parts of the world. So it is e.g. In English-speaking countries, for example, it is customary to refer to only real credit cards and (in some cases ) prepaid credit cards as credit cards , the latter being counted among credit cards only because of their name and this view is by no means undisputed. Other cards, such as debit or charge cards, are generally viewed as independent forms of card-based payment methods, regardless of whether they have the acceptance mark of one of the credit card organizations.

The most common type of credit card in Germany is a Visa , MasterCard or American Express charge card. The credit card business, like the debit card business, consists of issuing , card issuing, and acquiring , the billing of acceptors.

Legal nature

Credit cards are a means of payment ; in the case of card payments , the credit card company does not guarantee the merchant / seller any payment . The credit card company should not only be liable in a subsidiary manner, as is the case with the guarantee , but should establish its own payment obligation. The Federal Court of Justice (BGH) ranks since April 2002 with the signing of the load receipt by the cardholder this as an abstract promise of debt within the meaning of § 780 BGB, even if the contract contents of the card issuers sometimes considerably different. The partial cash analogy also represented by the BGH is not viable, however, because credit cards do not provide ownership of cash , but a claim against the credit card company is justified.

Similar to direct debits, there is a coverage and a currency ratio (see instructions ). The card issuer is aware that deficiencies in the currency relationship can also affect the coverage ratio . The coverage ratio is between the cardholder and the card issuer, the value ratio is established between the cardholder and the authorized dealer. There is also an enforcement relationship between the authorized dealer and the card issuer. In the enforcement relationship, the card company undertakes to reimburse the authorized dealer at certain intervals for the claims resulting from the use of the card with deduction of fees ( discount ). At the same time, the card company issues an abstract promise to pay in accordance with Section 780 of the German Civil Code (BGB) for future claims of the authorized retailer based on the use of the card , with the reservation of a chargeback in certain cases. The contracting company is obliged to recognize the credit card as a means of payment. In the value relationship, the contracting company is obliged to transfer ownership of the purchase item to the cardholder. In the cover ratio, the cardholder is obliged to make monthly payments for the card transactions made. The central question of whether and by when the cardholder can remove the legal consequences of his / her signature on the service receipt (debit receipt, slip) by revocation is legally controversial. The prevailing opinion is generally of a management contract ( §§ 665 , 675 of the Civil Code).

According to the prevailing opinion, the service receipts signed by the cardholder and / or the details of the credit card number then represent the authoritative instructions of the cardholder in accordance with Section 665 of the German Civil Code (BGB) Signing a proper debit receipt will result in an irreversible payment claim. Thereafter, the cardholder's right of revocation ends as soon as the card company has made an irreversible disposition. The contractor's claim arises under the condition precedent that the cardholder signs and submits a proper debit receipt.

Instructions can only be revoked if the merchant makes illegal use of the card company. The case law tends to soften the general irrevocability with reference to the general clause of good faith . The deficiency in the legal transaction must be evident from the currency ratio or it must be provable in a liquid manner. It must have evidently been based on a forgery of service receipts or an acknowledged void transaction, which is why the merchant is not entitled to a claim against the cardholder.

In particular, payment transactions with their large numbers of business transactions can only function reliably if those involved exercise a certain degree of control. This has long been recognized for giro traffic - and liability for damages in the event of a culpable breach of duty of care and control. Nothing else can apply in the credit card process. The credit card company must compare the cardholders who can be identified by the credit card numbers with the name of the cardholder entered on the service receipts before payment to the merchant. By discovering misuse of credit cards - at least in cases in which the merchant has not yet paid to the cardholder - financial losses (see account deletion ) can be prevented. The contractual company's claim for damages is reduced in accordance with Section 254 (1) of the German Civil Code ( BGB) if it has contributed significantly to the damage caused by the careless acceptance of credit cards in the mail order process . The contractual company's claim to payment based on the promise of debt agreed in the execution relationship in accordance with Section 780 of the German Civil Code ( BGB) is subject to the condition precedent ( Section 158 (1 ) of the BGB) that the cardholder signs and submits a proper debit receipt.

Umbrella brand companies

Acceptance marks from the three largest companies

The following credit cards currently exist:

Internationally issued:

  • American Express (since 1958 in Germany; since 1985 in Austria)
  • Diners Club (since 1954 in Germany; since 1960 in Austria)
  • Mastercard (since 1975 in Germany; since 1980 in Austria; previously Eurocard in Europe )
  • Visa (since 1980 in Germany and Austria)

Regionally issued:

The umbrella brand companies MasterCard and Visa are structured according to an association principle . Banks that issue these credit cards are members. In various national, regional (Europe, America, etc.) and global committees, votes are then taken on common standards, with regard to technology, branding, etc. American Express and Diners Club each issue the credit cards themselves.

Credit card acceptance

In order to use the credit card, it is necessary that the card is also accepted by the dealer or ATM . Most widespread are MasterCard with around 35 million acceptance points worldwide and around 2 million ATMs worldwide, as well as Visa with around 20 million acceptance points and 1.6 million ATMs worldwide. Credit cards are accepted by contracting companies both in Germany and at points of acceptance worldwide. The country with the highest adoption rate is the United States of America .

Since the different brands MasterCard, VISA, American Express, Diners Club and JCB have different price models, these are accepted differently in different countries.

technology

map

The credit card is one of plastic (usually PVC ) manufactured card in the size of a credit card ( ISO 7810 ), but there are exceptions, such as the American Express Centurion Card , the genuine titanium is that Sberbank over the top Visa , the pure gold is with diamonds and mother of pearl is busy, the Royale MasterCard of Dubai First Bank , consisting of metal is poured and then set with a diamond, the JP Morgan Chase palladium Visa credit Card of JP Morgan Chase & Co. , which made the precious metal palladium is or Pure + Solid Mastercard credit cards, from which London originating Pure and Solid Ltd. on request made of pure Pt999 platinum , 18 kt gold or Ag925 silver .

The card details are embossed on the front of the credit card (so-called embossing ); this is only not the case with some prepaid and debit cards. Only the embossed cards can be used in so-called "imprinters", colloquially "Ritschratsch devices". The imprinters do not charge the card immediately, but only when the transaction receipts have been submitted to the card company by the seller. On the back of each card is the signature of the cardholder and often a card security number ( KPN ) (with American Express on the front). It has a magnetic strip on the back on which the card data is stored. On July 1, 2002, DaimlerChrysler Bank was the first German bank to issue a (Visa) credit card with an additional EMV chip on the front. More data is stored on this than on the magnetic strip. The latter is to be replaced by the chip in the medium term. Since 2011, all German credit cards (MasterCard, Visa, American Express) have received an EMV chip, also in order to achieve SEPA compatibility. The associated specification is called EMV (Europay, MasterCard, Visa). MasterCard and, since 2012, Visa (issued by six German banks) also issue credit debit cards that enable contactless payment according to the ISO / IEC 14443 process.

Credit card number

The card number is a twelve to sixteen digit, unique identification number that can be used on credit cards and other magnetic stripe cards . The number contains a check digit calculated using the Luhn algorithm .

The credit card number uniquely identifies the card. This credit card number can, for example, be assigned to a person at the ATM, and the person can then confirm their own identity with the PIN . In the usual sales contract with a credit card, this unique credit card number is also used to identify the card and thus the person who in turn proves their own identity by means of a signature.

Card data

  • Cardholder's name: visibly embossed on the front (also stored on the magnetic strip)
    • Some prepaid cards that are sold as gift cards (so-called gift cards) do not have the cardholder's name.
The BIN code is usually both printed and embossed.
  • Card number: unique identification number with usually 16 (American Express: 15) digits, visible on the front and electronically stored on the magnetic strip or chip.
    • The first six digits form the BIN code .
      • The first 4 digits represent the credit card company.
      • The 5th digit stands for the type of credit card (e.g. with American Express: blue, green, gold, platinum).
      • The 6th digit indicates whether it is a second card, partner card, company card, etc.
    • The remaining 10 digits are the account number with the last digit as a check digit (according to the Luhn algorithm ).
  • Expiry date: month and year, visible on the front (also stored on the magnetic strip or chip). The card is valid until the last day of this month.
  • Check digit: CVC1 or CVV1, only stored on the magnetic strip or chip, not visible.
  • Signature: visible on the back (not embossed, not stored on the magnetic strip, but to be placed in a space provided by the cardholder)
  • Card verification number (CVC2 or CVV2): visible on the back, but neither embossed nor electronically stored on the magnetic strip
  • PIN : The PIN cannot be read from the magnetic strip, but is always compared online with the respective credit card issuer. The PIN is usually given to the customer by the issuing bank with the credit card. With some banks, the PIN must be requested separately from the bank. To cash withdraw from an ATM, the PIN is required. You may also be asked to enter your PIN at payment terminals in shops, especially abroad.

Pay

  • Use of credit card, data from the card is transferred by the seller by hand
  • MOTO (Mail-Order, Telephone-Order): Transmission of the data entered by the cardholder via the Internet, by letter, by fax or by telephone (this usually requires the card verification number for identification.)
  • When using a credit card, the cardholder presents the card electronically from the magnetic strip , memory chip or contactless with a chip card in accordance with ISO / IEC 14443
  • Sales inquiry at the retailer's POS terminal
  • Authorization request - routing via network operator, acquiring processor and Visa / MasterCard check routines on the technical systems of the issuing processor
  • Enter PIN if necessary
  • Authorization response (positive)
  • Use of a mechanical device (imprinter) to transfer the embossing onto paper
  • Signature of the buyer (not applicable if the PIN is entered beforehand)
  • Purchase contract and handover, delivery of the goods

Switch

  • It is possible to change money within individual, closed card groups. As a result, two cardholders within a closed card system do not have to use a conventional money transfer to balance mutual liabilities. This saves time and money. B. could arise when paying into a third-party account.

Accept

  • It is possible to accept money directly on the card. The decisive feature is the speed of the transfer, which enables fast real-time availability on the card and thus the option to pay out via an ATM. It becomes interesting when it comes to foreign transactions and payment instructions for products and services in the opposite direction, for example profit payment or reimbursement from complaints, etc. A cardholder can now dispose of his money worldwide more quickly because the money's path between the payer and the cardholder no longer takes the bank's transfer route. This also prevents incorrect bookings and delays of any kind, as the transaction takes place within the closed card system and no further information is required. Credit cards can usually only be topped up by bank transfer.

Pay off

  • Withdrawals of cash using credit cards usually take place at ATMs or at the cash register of financial institutions. In Germany, it is also possible in most supermarkets to withdraw up to 200 euros from a certain purchase value (usually 10 euros).

Charge

There are several ways to top up prepaid credit cards. The type of card that is possible is determined by the issuer.

  • Charging via so-called charging terminals at the OCP (Online Charging Point) or at the POS (Point of Sale) takes place in real time. The POS top-up terminals with the ad-hoc top-up encounter a z. B. when topping up prepaid mobile phone cards by credit card at gas stations or directly on the Internet. What is interesting, however, is the real-time top-up at so-called OCPs with cash payment options. Prepaid cardholders can use OCPs in many locations worldwide such as B. Internet cafes, betting shops or at excellent service points that offer longer opening hours, you can top up your prepaid card for a fee with cash.
  • Top up via SMS.
  • Top up via internet payment service providers such as B. PayPal , Giropay or Sofortüberweisung .
  • Top up by cash payment at the bank counter ( payment slip ) or by transfer to the credit card account.

Card blocking

The issuing agency tells you which phone numbers should be used for blocking (if the card is lost). Depending on the type of card or issuing agency, additional telephone numbers are available in Germany. Alternatively, in most cases, a card can be blocked using the nationwide blocking emergency number 116 116 . Today, you can block your card yourself, for example using a mobile app or in e-banking .

Liability for card misuse

As soon as the loss of a credit card is reported to the issuing institute, the cardholder is no longer responsible for any improper use made after this point in time. The cardholder is liable for up to EUR 50 for damage that occurred prior to the block, in Austria up to EUR 150; unless the grossly negligent breach of the cardholder's obligations, such as B. the duty to carefully keep the card, the confidentiality of the PIN or the immediate notification after becoming aware of the loss have contributed to the abuse, z. B. Storing the credit card in the car. If the card has been stolen and cash has been withdrawn using a PIN, the courts generally use so-called prima facie evidence , i.e. that is, it is believed that the credit card system is secure and therefore the thief is given the secret number in some form, e.g. B. as a note, was accessible. This is then a matter of gross negligence and the customers must be liable for the damage themselves, even if they credibly affirm that they have not noted the PIN anywhere.

As a rule, the consumer's liability provisions are the same at the issuing institutes in Germany. In principle, however, the general terms and conditions must be observed in individual cases, as the liability conditions must be listed there.

According to Stiftung Warentest , Visa, Mastercard and the German savings and banking associations have assured that card users who use the Mastercard Identity Check (SecureCode) or Verified by Visa (see 3-D Secure ) for online payments are no worse off than before these procedures were introduced .

Four-party system

The credit card business is a four-party system; in addition to the payment system, there is the card issuer, the card owner, the merchant bank (acquirer) and the card acceptor (merchant). In the three-party system, the issuing bank and the dealer bank are identical.

Card issuer: receives an annual fee from the cardholder and receives the interchange fee for every transaction.

Merchant bank: Receives the discount minus the interchange fee.

Payment system (VISA, etc.): Receives various fees from the card issuer and the merchant bank per transaction.

Dealer: He adds all fees to his prices.

Cardholder: Pays the fees through the merchant and the card issuer. In return, he is given the opportunity to simply pay and, depending on the contract, the option of paying his credit card bill at the end of the month.

fees

Dealer

The seller of goods or services bears the transaction costs and passes them on to the buyer.

  • Fixed costs for a card reader, software etc .: 10… 30 € per month
  • Variable costs: 0.5 ... 2.6% ( discount )

There is a surcharge of around 1% for business cards and international cards, because only cards from private customers in the EEC are regulated.

In addition, the conditions differ depending on the contract, industry , transaction volume and provider; these are house banks and specialized payment service providers. Apart from accepting American Express , the retailer has no direct business relationship with the credit card companies. Depending on the contract and the specific card, the fees can be higher than when processing payments with a debit card .

In 2005, all retailers in the EU spent more than 25 billion euros on the use of EC, debit and credit cards , with a total turnover at sales outlets of 1,350 billion euros. These fees contributed 1/4 of the retail banks' profits. The number of card payments in the EU tripled from 2005 to 2018 from 14 billion to 42 billion.

With the EU regulation, part of the credit card fees, the so-called interchange fee, for private cards of the four-party systems (including Mastercard and VISA), which are issued in the EEC for payments in the EEC, to a max. 0.3 percent for credit cards and 0.2 percent for debit and prepaid cards. As of January 2018, merchants are not allowed to pay additional fees for paying with regulated means of payment such as B. Mastercard and VISA charge more. Since paying by credit card incurs additional costs, some merchants offer discounts on other means of payment instead . Overall, these regulations increasingly led to the cost of credit card payments being allocated to all types of payment.

Buyer / Cardholder

Many credit institutions issue credit cards to their customers free of charge. Some require a certain amount of sales on the credit card so that it is free for the customer. Others charge an annual fee. There is also the option of purchasing so-called motif cards, which then cost around 10 to 15 euros more once.

While use in Germany (or in the euro zone ) is usually free (or even rewarded with bonuses), use in foreign currency areas can be associated with additional fees. Fees are often charged for cash payments, especially if they are made at third-party institutions or abroad. For example, the abbreviation AEE for foreign transaction fee is used on the credit card statement . B. in VISA used.

Credit cards are issued to the cardholder either by a bank (MasterCard, Visa, JCB ) or a credit card company (American Express, Discover , Diners Club ). A prerequisite for receiving a credit card is sufficient creditworthiness , which often has to be proven in the form of regular incoming payments. Of these were prepaid cards an exception - for them there is no positive credit rating is required.

Card types

With a “real” or classic credit card , the cardholder receives a monthly statement for all goods and services purchased (the cardholder only receives invoices from the respective retailer / service provider). This can be paid immediately or paid off in installments. The latter option, the so-called revolving credit , is traditionally offered by credit institutions primarily in the Anglo-American area, but is also available in Germany. Depending on their bank and their credit card agreement, customers can repay 2, 5, 10 or 50 percent of the outstanding amount every month. However, you are not tied to a fixed repayment rate, but can settle the loan amount at any time with special repayments. Irrespective of a full repayment, the credit card can be charged again within the personal credit limit.

Charge card

With a charge card , the cardholder receives a monthly invoice that is due immediately or within a period of up to 30 days. The customer therefore receives an interest-free loan with a very short term for the period between the payment of a product and the due date of the invoice. This is the most common type of credit card in Germany. Another principle, which has only recently become widespread, is the so-called charge and credit procedure. Strictly speaking, it is a mixture of a real credit card and a charge card. With a charge-and-credit card, the cardholder can decide for himself how high his card limit will be. Depending on the card-issuing bank, this mostly informal credit line can be between 25% and 100% of the deposit amount. Example: The bank grants 25% additional credit for a deposit of € 500 - the cardholder can dispose of € 625, whereby € 125 is charged with interest just like a regular credit card. The fees and limits depend on the respective bank that issues these cards. This principle is mainly used by credit institutions outside of Europe and is therefore informal because there is no credit or credit check.

Debit card

With a debit card, the cardholder is charged immediately after payment (usually via the cardholder's current account ). In Germany, the most common debit card is the Girocard , which functions internationally as a Maestro card (issued by MasterCard) or V PAY (issued by Visa). Another example is the less common VISA-Electron card in German-speaking countries (issued by Visa). These cards cannot be overdrawn because they are not embossed (see technology / card ), have their own acceptance mark and therefore their own network of acceptance points. Because of this, they are generally not considered credit cards. In addition, there are also MasterCard and Visa debit cards (mainly used in the USA), which are regarded as credit cards because they have the credit card acceptance mark of these organizations. In some countries, such as Germany, these cards cannot be distinguished from charge cards or real credit cards; in other countries, such as the USA or Great Britain, such cards are generally identified by the additional label Debit . In both cases, however, they are almost always embossed and can therefore be covered.

Daily charge card

A daily charge card is a combination of a charge and a debit card. Billing takes place via a technical card account that can be kept in the credit. In addition, a permissible monthly credit line is granted. While you have credit, the transactions are debited to your card account immediately. The credit line can also be used when the credit is used up. After the monthly statement, all debit amounts are immediately withdrawn from the cardholder's reference account (usually a current account) by direct debit. This means that there is no default interest, as is the case with the revolving credit of charge cards.

Virtual credit cards

So-called virtual credit cards are available for online purchases. Most of them are virtual prepaid credit cards. These cards only consist of the card data necessary for telephone or online purchases. On the Internet, it works like a normal credit card because, in contrast to a purchase in a store, the credit card does not have to be physically present. The card data of a virtual credit card consists of the credit card number , validity, cardholder name and CVC / CVV (security check number). With some providers, these credit card details are created anew for each telephone or online purchase. Virtual credit card provider is u. a. the Wirecard Bank (MasterCard).

Prepaid cards

In the meantime there are also prepaid cards with which payments are not processed on a credit but on a credit basis. The amount to be paid is paid from a previously deposited credit. So it is a prepaid card , not a credit card in the strict sense.

The cards can only be used at credit card acceptance points that are connected online. This is to prevent overdrafting of the credit. The account cannot be emptied beyond the existing amount - for example in the event of card theft. Most cards are not embossed and are marked “Electronic use only”.

These cards are issued without a credit check to people who are not creditworthy, for example who are not yet of legal age or who have a negative entry in the Schufa . They are therefore popularly known as the “credit card without Schufa”. Since the cards work on a credit basis, there is no risk for the bank. With the prepaid credit card, people with poor credit ratings now have the chance to own a full credit card.

Prepaid credit cards are sold in Germany and Switzerland by various banks and other providers, some with credit interest.

They have the same security mechanisms as "classic" credit cards. Since prepaid credit cards work on a prepaid basis, they are in many ways even more secure than traditional credit cards with credit lines. Prepaid credit cards cannot be overdrawn, which is why they are particularly suitable for online payments and travel. Should data abuse or theft occur, the perpetrator can only dispose of the credit that is currently on the card. The prepaid credit card cannot be overdrawn, so the damage is limited.

The disadvantage of these cards is in some cases the fees. Some providers charge a fee for every transaction. Some providers charge fees for topping up the card and fees for using the card. Some banks also offer models with only a one-time annual fee. There, too, there are fees for certain services, such as cash withdrawals from machines. As a rule, there is no charge for topping up and using these cards. Prepaid credit cards with no annual fee are usually only available in connection with a current account at the issuing bank, although fees for withdrawals and transactions in foreign currency are usually incurred.

There may also be restrictions on the acceptance of prepaid credit cards; the prepaid credit card is often rejected as a means of payment , especially with car rental companies . The reason for the rejection is the lack of credit on the card. With "classic" credit cards, rental car companies reserve the right to block a certain amount on the credit card as a deposit. If defects are found after the rental car has been returned, the company can use the amount for them. A credit card thus serves as security for the car rental company. Exactly this security is missing with the prepaid card. Only around a third of common car rental companies accept prepaid credit cards as a method of payment.

There is also a risk with prepaid credit cards from foreign issuers. The deposited credit balance of the credit card is often subject to little or no deposit protection . If the card issuer becomes insolvent, there is a risk of the deposited credit being lost.

Another disadvantage for the cardholder is the possibility of garnishment of the prepaid credit on the credit card account. In the meantime, however, there are first offers to convert the credit card account to the garnishment protection account (P-account), which was officially introduced on July 1, 2010. This leaves the account holder with a monthly allowance to live even in the event of ongoing garnishments, which cannot be garnished.

Premium credit cards

Classic credit cards that offer special additional services are called premium credit cards. This can be, for example, travel cancellation, international travel health or luggage insurance. The providers often charge between 80 and 100 euros per year for the additional services. According to a study by Stiftung Warentest , these credit cards are usually not worthwhile. They are either expensive or lack travel protection. The testers therefore recommend that contracts be concluded individually.

literature

  • Uwe Blaurock : Credit card business . In: German and European banking and capital market law , Springer, Heidelberg, 3rd edition 2017, § 51, ISBN 978-3-662-52806-8 .
  • Haun / Neuberger: credit card business . In: Bankrecht und Bankpraxis , Part 6, Section 7, ISBN 978-3-86556-009-4 .
  • Robert D. Manning: Credit card nation: the consequences of America's addiction to credit , New York, NY: Basic Books, 2000

Web links

Wiktionary: credit card  - explanations of meanings, word origins, synonyms, translations
Wikivoyage: Credit Cards  Guide
Commons : Credit Cards  - Collection of pictures, videos and audio files

Individual evidence

  1. ^ Karsten Seibel: The strange aversion of Germans to credit cards. In: welt.de . December 24, 2018, accessed December 24, 2018 .
  2. ↑ The rapid development of credit cards as an international means of payment
  3. ↑ NZZ: When Frank McNamara forgot his wallet
  4. ↑ LIFE magazine of April 27, 1970, p. 30ff, author: Paul O'Neil: “American banks have sent over 100 million credit cards to unsuspecting citizens in the last four years. Brigades of thieves, swindlers and bad guys galloped through the shops and piled up devastating debts. ”(Translated from the American)
  5. ↑ OLG Munich, judgment of March 10, 1988, Az. 29 U 5747/87.
  6. ^ Rudolf Kahlen: The cards are being reshuffled . In: The time . August 5, 1988 ( zeit.de [accessed on January 2, 2018]): “The first hundred thousand freshly printed plastic cards had to be crushed shortly before they were issued. [...] Who was the mastermind behind the court action is still unclear today. The one who made use of the lawyers of the Baden association pro virtute [...] "Of course there are economic figures behind it" "
  7. ↑ visa.de Visa Infinite
  8. ↑ Timothy McGettigan: Illusions of Affluence. Theory & Science (2007). ISSN  1527-5558 .
  9. ↑ visa.de
  10. ↑ NFC technology
  11. ↑ Reading out via mobile phone ( Memento from June 7, 2012 in the Internet Archive )
  12. ^ BGH, judgment of April 16, 2002, Az .: XI ZR 420/01
  13. ↑ BGH ZIP 2002, 974, 975
  14. ^ Peter W. Heermann, Money and Money Transactions , 2003, p. 270.
  15. ↑ Peter W. Heermann, Money and Money Transactions , 2003, p. 277 f.
  16. ↑ Dorothee Einsele, Banking and Capital Markets Law - National and International Banking Transactions , 2006, p. 278.
  17. ↑ BGH NJW 2002, 3698
  18. ↑ BGH WM 2005, 857
  19. ↑ cf. BGHZ 73, 207, 211; 95, 103, 108; BGH WM 1978, 998, 999
  20. ↑ BGHZ 150, 286, 294; 152, 75, 80
  21. ↑ Company information | American Express Austria
  22. ↑ Facts & Figures | Diners Club Austria
  23. ↑ Six Group takes over Austria's PayLife | economy.com
  24. ^ History on the website of the card complete Service Bank AG
  25. ↑ https://www.check24.de/kreditkarte/news/kreditkarteensystem-russland-mir-58494/
  26. ↑ mastercard.com
  27. ↑ mastercard.com ( Memento of the original from July 20, 2011 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.mastercard.com
  28. ↑ visa.de
  29. ↑ visa.de
  30. ↑ MasterCard PayPass
  31. ↑ Visa payWave
  32. ↑ Withdraw money in the supermarket - these are the markets. Retrieved April 8, 2020 .
  33. ↑ compare www.sperr-notruf.de
  34. ↑ Austria: maximum liability according to Section 44 ZaDiG (Payment Services Act ); For explanations, see section Liability and Reimbursement Obligations regarding Payment Services verbübersrecht.at (as of December 4, 2015); Current version of the
    law see: § 44 ZaDiG (Payment Services Act )
  35. ↑ Stiftung Warentest: More security with “Mastercard SecureCode” and “Verified by Visa” . test.de, May 6, 2011. Retrieved December 21, 2012.
  36. ↑ Interim Report I on Payment Cards - Sector Inquiry under Article 17 Regulation 1/2003 on retail banking. European Commission, April 12, 2006 : “Total sales volumes with point-of-sale card transactions in the EU in 2005 were more than € 1350 billion. It is estimated that businesses in the EU paid more than € 25 billion in fees in 2005. It is estimated that cards alone account for up to 25% of retail banking profits. ";
  37. ↑ Payment statistics for the reporting year 2018. European Central Bank, July 26, 2019 (page 2, Figure 1: Use of the most important payment services in the euro area).;
  38. ↑ Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on interchange fees for card-based payment transactions / * COM / 2013/0550 final / 2 - 2013/0265 (COD) * / , accessed on 7 May 2016
  39. ↑ derhandel / .de / ... - EU Parliament approves cap on card fees (accessed on May 7, 2016)
  40. ↑ Changes 2018 overview. Retrieved January 2, 2018 .
  41. ↑ Jorgos Brouzos: Migros and Coop report Visa and Mastercard to the Weko. In: bernerzeitung.ch . April 6, 2019, accessed April 6, 2019 .
  42. ↑ No fee Paying must be free. In: test.de . February 28, 2019, accessed April 6, 2019 .
  43. ↑ The card types at a glance
  44. ↑ kreditkartenbutler.de
  45. ↑ Schufa-free credit card - truth or myth? . simplyfinanzen.de, March 14, 2012. Accessed April 2, 2013.
  46. ↑ Credit cards in the test of the Stiftung Warentest In: Finanztest 9/2018, pp. 16–22 and test.de from August 21, 2018.