A disruption at the payment service provider TeleCash led to disruptions in card and smartphone payments across Germany on Thursday. But what exactly is TeleCash and how does the system work?
Cashless payment has become increasingly popular in Germany in recent years. In 2009, cash accounted for around 60 percent of retail sales.
By 2023, however, the picture will have changed. Cash as the most popular means of payment has been replaced by card payments, which now account for around 62 percent of retail transactions.
Software problem paralyzes card payments
It is of course all the more annoying when paying with a Girocard, debit or credit card does not work. This was the case at many cash registers on Thursday this week due to a disruption at various payment service providers.
According to the payment service provider TeleCash, there was a software problem on Thursday that “temporarily affected the connection to parts of our payment transaction/processing systems.” But other providers, such as Nexi, also had problems.
However, the German banking industry, the joint lobby of German banks, has now given the all-clear. There are “no more disruptions to payments with debit and credit cards,” it says in a statement. But how could this disruption have occurred in the first place and what is actually behind the payment service provider TeleCash?
After a disruption: What exactly is TeleCash?
TeleCash is one of the largest payment service providers in the world. The company was founded in Stuttgart in 2003 and is now part of the US payment service provider Fiserv.
TeleCash offers card readers for retailers, among other things, and thus also the processing of card payments at the checkout. The company provides shop owners with stationary or internet-based terminals for card payments.
These accept payments with Girocard, the former EC card, as well as with credit or debit cards such as Mastercard or Visa. Contactless payment with a smartphone or smartwatch is also possible here.
How does card payment work?
If you pay with your Girocard, debit or credit card these days, the Girocard process runs in the background. It is an electronic payment system in which you authorize the payment process by entering your PIN.
For example, if you pay with your smartphone, you authorize the payment using a biometric process, such as your fingerprint or facial recognition.
This Girocard procedure has been in existence since 2007. At that time, German banks and savings banks established the Girocard as the new standard for payment systems and ATMs.
This replaced the previously dominant EC card and also the electronic cash system, even though it is still popular today.
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Source: https://www.basicthinking.de/blog/2024/09/13/was-ist-telecash/
