Giropay Introduction & Review
4.67 (93.33%) 3 votes

giropayIn respects to the volume of transactions made in consumer goods, textiles and various types of information and manufacturing technology, Germany is the top-ranking country in Europe for diverse American and international merchants to target. Gaining a foothold in Germany is considered ideal, since its boundaries touch nine countries: Austria, Denmark, Czech Republic, Poland, France, Switzerland, Netherlands, Belgium, and Luxembourg.

Within the European Union, Germany is the largest and most economically strong country; it serves as the financial nucleus for continental Europe, with the headquarters of The European Central Bank being located in Germany’s capital city, Frankfurt. With the introduction of the Euro, Germany is has never been more ripe for the picking than it is right now. It distributes its resources and capabilities into different regions and cities within its borders and lifts restrictions on particular markets and limitations on business and sales beyond its capital city. This broadens the horizon for merchants to gain consumers on a regular basis quickly and easily.

Giropay: Generating Sales in Germany

Online merchants who target the German market need a seamless method for processing their German consumers’ payments. Giropay was launched in 2006, and is the collaboration efforts of a total of 1,300 banks, representing over three quarters of the market in Germany. Giropay is a real-time online bank system that is very similar to the iDEAL payment system used in the Netherlands. The Giropay system is so simplistic in nature that it can be integrated into the merchant’s online shop in only a few hours to get it up in running. The only stipulation for the consumer making a payment via Giropay is that their bank account must be affiliated with Giropay. Registration is not required to use Giropay, since the affiliated bank has their own transaction processor.

On the consumer’s end, Giropay offers the same convenience of doing business with their online banks. The level of transaction security basically depends on the specific participating bank the consumer uses, two-factor authentication (2FA) or PIN and TAN based authentication. When consumers use Giropay, sensitive information such as credit card or Giro account numbers is not accessible to the merchant. However, consumers lose their right to request refunds when processing payments via Giropay.

How Giropay Works

Giropay is offered by merchants as a fast, e-commerce payment service that guarantees payment amount for up to 5000 euros. The main difference with using Giropay as opposed to using credit cards is that it does not use a financial go-between institution to process transactions. The whole process of a Giropay transaction starts as soon as the consumer visits an online shop and selects a product for purchase. The Dutch payment engine Buckaroo included Giropay as an online payment method in its online payment services in the spring of 2008 and establishes a secure 128bits SSL connection for consumers using Giropay. From the merchant’s payment options screen, the consumer will see a list of payment methods. If the consumer selects the Giropay box, he is asked to fill in a BIC code. The following steps show how the consumer uses Giropay to complete a purchase:

1) Consumer selects Giropay payment option and selects his bank
2) They are then redirected to their participating bank’s login page
3) Bank autofills customer’s transaction data
4) Consumer enters account number and PIN
5) Confirmation of payment is done with a one-time password authorizing the financial transaction number or TAN
6) If their bank offers the service, the consumer applies a digital signature to the transaction using a 2FA token
7) The bank authorizes transaction in real-time, deducts the amount directly from the consumer’s account or rejects it if there are insufficient funds.
8) Merchant receives real-time confirmation of the payment by the bank
9) Consumer is redirected back to the merchant’s page with a confirmation that the payment has been successfuly processed.

The advantage of merchants using this payment engine is that it delivers a real-time invoice of all payment transactions, including Giropay payments. For up-to-date information on rates for offering Giropay as a payment method, we refer to our newest rates list. Giropay is gaining more and more popularity since its launch in Germany as a payment method. As one of the wealthiest nations in the world, Germany’s Giropay allows merchants to create a payment platform without setting up a bank connection or installing security certificates. Furthermore, Giropay is fully integrated in the Buckaroo Payment Engine, and programmed for easy installation integration on a merchant’s website enabling them to start taking transactions within a few hours, opening the potential for the merchant to attract 17 million consumers. Merchants can learn about current rates for processing Giropay sales by going to the Buckaroo website.