Definition of Giropay
Giropay is based on online banking with PIN and TAN and enables payment by online bank transfer. To pay with Giropay, all that is needed is a checking account with access to a registered online bank. No registration with a house bank or savings bank is required to use Giropay. The settlement process is very simple and comparable to PayPal: The customer initiates a transfer at his bank and the seller receives a direct feedback about the successful transaction. Since PIN and TAN are only entered on the bank’s website, security is almost as high as with traditional online banking. The use of Giropay is also free of charge.
A smart online payment solution for all bank customers
In an online store, the customer selects his products and then goes to the payment area, where he selects the Giropay procedure. The BIC (Business Identifier Code) or bank code is requested and the shopper is then redirected to the login area of his bank. There he completes his details as usual and confirms a pre-filled form. This document contains all the data relevant for the transfer to the merchant. By entering his TAN code, the transaction is carried out and the merchant receives the money under the usual banking conditions. However, the bank sends him a confirmation of the ordered transfers in advance, which speeds up the release of the delivery of the subscription, product or service to the buyer.
The advantages of Giropay for customers and merchants
In principle, Giropay can be used for almost all online bank accounts in Germany. Since the merchant receives a direct feedback about the made transfer, the risk of default is reduced. He does not have to wait until the payment is received, but can ship the goods directly. This fact is also one of the biggest advantages for the buyer. The money is debited from his bank account and the goods are shipped as soon as possible. Since PIN and TAN are not entered by the seller, but on the bank’s homepage, the merchant has no knowledge of the secret bank data, which prevents fraud. The prerequisite for using Giropay is that one’s own bank offers this payment procedure, which is currently the case with many savings banks, Volksbanks and other credit institutions.
Giropay has a high level of data protection, personal accounts and sales information cannot be viewed by third parties, not even by Giropay itself. Data transfers are encrypted with advanced validation certificates. Giropay also uses 2-factor authentication, which provides the highest level of security for online banking access.
Paydirekt + Girocard + Kwitt = Giropay
For a long time, German banks and savings banks have struggled to find an answer to practical payment service providers like PayPal. The new financial product Giropay, an amalgamation of Paydirekt, Girocard and Kwitt, should now succeed in doing just that.
Giropay allows customers to choose the payment method that works best for them. Among them: Online bank transfer or with username and password or biometric authentication (a payment method that includes greater protection for the buyer). For sellers, this means an expansion of the range of payment methods.
In addition, Giropay also introduces a new feature for users to send money as well. This makes it possible to pay, send and also request small amounts to natural persons such as friends and acquaintances.
Conclusion: Giropay is considered a secure, fast and simple solution for online payments
The payment service guarantees a very secure payment processing. However, the customer makes an advance payment , for pure product purchases, which in turn is less the case with SaaS subscriptions, since the customer receives his delivery immediately. Just as the merchant receives payment immediately – especially for the subscription provider can prove to be a real advantage. The Giropay payment method is safe and free of charge for the consumer, who only has to activate his bank for ordering via Giropay, as the settlement takes place directly via online banking.