In an effort to move away from Germany’s “cash culture,” German banks have recently made Apple Pay available to over 50 million customers, encouraging the use of contactless payments via mobile phones.
Last week, 371 of Germany's 379 savings banks made Apple Pay available, in a move that will benefit 50 million customers. A lot of major banks have adopted the service, including Commerzbank, Norisbank and Landesbank Baden-Wurttemberg.
As of now only credit and debit cards issued by the German banks themselves can be integrated into Apple’s payment service. The head of Apple Pay, Jennifer Bailey, has stated that Apple Pay will be integrated into Germany’s girocard system in the coming year. Girocard is an interbank system that connects all German banks and ATMs.
Apple’s payment service comes with the advantage of security. While one can use either their iPhone or Apple Watch to make purchases, they must authorise transactions with either face or fingerprint recognition technology.
Furthermore, contactless payments are enabled by NFC (near-field communication), which banks can only access through Apple Pay, due to a special high-security chip in Apple devices called the “Secure Element”. NFC allows devices equipped with the technology to exchange data.
Back in November, Germany passed that a law that required service operators like Apple to provide banks, and other financial services that use their technology, full access to their systems infrastructure for a small fee. The law is part of recent action taken by Germany to regulate US technology companies.
This law ensures that competitors in the mobile payments market have access to the technology that makes Apple's systems work. Apple criticised the law, claiming that they already provide banks with access to their NFC infrastructure.