With the new requirements for terminal certification TA 7.2 and DC POS 3.0, the operation of POS terminals is additionally secured and standardised. A special focus is on the topic of "contactless payment". This is not only additionally protected with the regulations, but also simplified. For merchants, this change means that they can offer their customers more security and convenience. It also means that terminals have to be adapted to the new standard. If possible, with a software update. Otherwise, the terminal must be replaced. Initially, merchants who actively accept credit cards, will be affected - but by 2024, all will be.
About contactless payment
According to a representative study* by the Deutsche Bundesbank, contactless card payment is increasingly becoming the norm. According to the study, it accounts for more than half of all transactions with Girocard or credit card. The pandemic has also contributed to this: about half of the respondents preferred the payment method for hygiene reasons.
The trend becomes particularly clear when looking at the developments regarding Girocard:
- There are around 100 million Girocards in circulation in Germany, of which around 80 million now support contactless payment.
- Merchants have also upgraded: more than 87% ** of Girocard acceptance points now offer the payment method.
- In 2021, the share of contactless Girocard transactions was 72.6%.***
Integrating the payment method is easy. Merchants, who accept Girocard, only have to activate the function once at the POS. This then results in many advantages for them:
- They enable their customers to pay more conveniently - now without entering a PIN up to €50.
- With the option of contactless payment, they also offer customers a hygienic solution that is currently in increasing demand.
- They provide customers with a wider range of payment options.
- Through the use of NFC, they also offer a very secure payment.
* Deutsche Bundesbank ** girocard.eu ***EHI
Who determines the regulations?
The German Banking Industry (DK) defines rules for German payment transactions in the Technical Annex (TA). All operators of Girocard terminals must comply with these regulations. In addition, the DK and the German credit card acquirers (acceptance companies) have jointly developed an approval procedure for terminal operation - the DC POS regulations. These apply to debit and credit cards as well as to the Girocard. DC POS determines the technical and functional requirements for the terminals. Devices with this approval can accept and process all cards.
What are the changes?
The new Technical Annex 7.2 contains for the first time the common approval procedure according to DC POS 3.0, for contactless and contact-based payments. And thus also uniform standards for payments via NFC technology - for cards or mobile phones. With the updated guidelines, contactless payment in particular is additionally secured and further simplified. Among other things, the following changes have been determined:
- Payment transactions are additionally protected by new security requirements, especially contactless payments.
- To facilitate contactless payments, the Cardholder Verification Method (CVM) limit will be increased to EUR 50. This means that the PIN will only be requested for payments above 50 euros.
- For more convenience in contactless payment, the single-tap function is introduced. This means that if a PIN has to be entered, the card does not have to be inserted or held in front of the device a second time. The transaction is therefore carried out in one go.
- For certain industries (e.g. car rental), partial authorisation for payments and reservations now applies. This function allows the processing of a reduced amount.
- Dynamic Currency Conversion (DCC) also enables contactless payments in local currency.
Simplification of strong customer authentication
With the Payment Services Directive 2 (PSD2), German payment service providers have been obliged for some time to require strong customer authentication for payments at the POS under certain conditions. For this, two-factor authentication is checked and authorised. The handling of this is also improved for contactless credit card payments by the new regulations. In terms of TA 7.2 and DC POS 3.0, the following now changes in this context: if strong customer authentication is required, the terminal must continue the transaction without a new reading process (in the sense of the Single Tap described above) and request the required authentication from the customer, e.g. with online or offline PIN. The card does not have to be inserted into the chip reader. This simplifies the payment process.
Implementation and time schedule
The existing terminals certified according to TA 7.1/ DC POS 2.5 can initially continue to be operated. The implementation of TA 7.2/ DC POS 3.0 is to take place gradually until 31.12.2024. The time schedule:
We show you which POS terminals can be updated via software and which need to be replaced: