Fast payment through Electronic Cash (E-Cash)
The “Electronic Cash” payment system, also known as e-cash, is a debit card system for cashless payments. It is operated by the German Banking Industry (DK), the representative body of the leading banking associations. Cards bearing the “Electronic Cash” logo are issued by credit institutions. E-cash is a PIN-based debit procedure in which transactions are charged to the cardholder’s current account immediately after they are submitted by the merchant. Hence, e-cash is one of the fastest payment systems and is becoming increasingly popular with customers and merchants. The personal identification number is entered by the cardholder at an EFT-POS terminal (Electronic Funds Transfer Terminal).
E-Cash: Payment at the terminal becomes increasingly popular
By entering their PIN number at so-called electronic cash terminals, cardholders can make cashless payments with an e-cash card. Payment with e-cash is particularly secure – the threat of non-payment and return debits due to insufficient funds in the buyer’s account is ruled out. Payment with e-cash is possible both at payment stations and at unattended terminals such as a ticket vending machine, offering numerous opportunities for merchants.
Licensing requirements for electronic cash payment processing
The opening and operation of a terminal for the processing of e-cash payments is subject to approval. This is issued by the German banking industry if the required technical principles are fulfilled by the respective operator. The technical principles are part of the technical annex to the contract for approval as a network operator in the electronic cash system, which is established by the German banking industry.
What makes e-cash so secure?
All EC cards are equipped with a magnetic stripe on which static information is stored. Since 2000, many banks have been equipping their customers’ e-cash cards with an additional chip. This chip functions like a small computer and has advantages over the standard magnetic strip. For example, its contents can neither be read out completely nor copied. Despite the advantages of the chip, magnetic strips are still used on EC cards to ensure their compatibility with the Maestro card. Since 2011, however, the secure chip has been mandatory for e-cash transactions.
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