The sign saying “card payment not possible” was almost extinct because of the pandemic. It is currently hanging on many shop doors again – not only in small cafés or boutiques, but also in large chains such as Aldi, dm or Edeka.
Cashless payment has not been possible in many places since last Tuesday due to a technical failure. The bad news for customers: This is likely to remain the case with some retailers for days. Although there is now an update for the affected payment device from the US manufacturer Verifone, the Frankfurt-based service provider Payone announced at the weekend.
However, the version is not stable enough to be used across the board. The Germans’ unbroken love of cash, of all things, is also likely to have favored the problem.
The background: The failure resulted from a software error in a card reader that is very popular in this country – the “H5000” model from Verifone. It is “the most used terminal in Germany”, as the manufacturer advertises on its website. The device also owes this position to the Corona crisis.
Because of hygiene, the otherwise cash-loving Germans increasingly wanted to pay by card. Various payment service providers equipped their customers with the model during the pandemic when card readers were suddenly in great demand.
But that’s exactly where the problem seems to lie: there were leftovers, because the device was “no longer offered for sale when new,” emphasizes Verifone. That’s still an understatement: The device came onto the market in 2012, and the vintage car was officially withdrawn from sale at the end of 2018.
The fact that retailers are still allowed to use the phased-out model until the beginning of 2025 is thanks to a transitional period. The device no longer supports the current security standard “TA 7.2” of the German banking industry. The manufacturer only wants to deliver software updates until 2023.
The exact problem behind the failure of the devices has not yet been finally clarified. A sudden software error without an update having been previously installed on the devices is unlikely with such a proven device. The Frankfurt-based payment service provider Payone mentioned an expired security certificate as the cause in a first message over the weekend.
The software certificates serve as a kind of key to verify the communication between the service provider and the card reader in the store. The device can use the certificates to check that it is actually connected to the correct server. These certificates always have a built-in expiry date – so it is up to the manufacturers and network operators to offer new certificates in good time.
If a certificate expires unnoticed, it would be a mistake on the part of the provider. As happened in German retail, the devices would suddenly no longer work. The problem: New certificates cannot simply be reloaded without a functioning network connection that has been checked using a valid certificate. Because that would break the chain of trust. The devices would therefore have to be updated manually by employees of the providers on site in order to ensure the security of the devices. But that could take weeks.
But H5000 manufacturer Verifone is not aware of any guilt. The failure is by no means due to the fact that an expired certificate was overlooked. “We would like to emphasize that the issue is not related to a certificate expiration or a security vulnerability and does not pose a security threat. Rather, it is a software malfunction in the H5000 software. However, Verifone does not explain how software that has worked smoothly for years could suddenly fail like this.
Old devices, faulty software – the digital payment glitch is a sign of something bigger. The fact that retailers shy away from investing in the latest technology is probably also due to the unbroken love of cash among Germans. Only 15 percent of citizens can imagine doing without cash, according to a recent survey by the Federation of Consumer Organizations (vzbv).
Consumer advocates are critical of the trend away from cash in retail. After the most recent mishaps, they feel confirmed: The problems brought to light “the risks that our economy’s over-dependence on cashless payment instruments entails,” said Claudio Zeitz-Brandmeyer from vzbv. “Even if cashless procedures are becoming more and more important, cash remains important as a safe alternative.” Zeitz-Brandmeyer calls for a law so that cash payments must generally also be possible everywhere in retail.
In the past two years of the pandemic, consumers pulled out the card significantly more often than in previous years. Nevertheless, last year only slightly more than half of retail sales (59 percent) were generated with the card, as a current survey by the EHI Retail Institute shows. And just over a third of transactions (38 percent) were processed with credit or debit cards. This is because consumers still prefer to pay with coins and bills, especially for small amounts.
And sometimes they have to: there are still plenty of cash-only shops that only accept cash. According to the polling institute YouGov, almost half of consumers have had at least one experience in the past year that they wanted to pay by card but only cash was accepted. That’s probably why most people have a nest egg in their wallets anyway.
The average citizen carried around 75 euros in cash last year. Abroad has long been further: In Sweden, Finland or Norway, more than two thirds of all purchases are made with the card. Cash is no longer accepted in many shops.
Incidentally, ATMs are not affected by the technical problems. The Verifone terminal is only used in retail. The supply of cash continues to function. However, the banking industry is silent as to whether there has already been a rush to ATMs or whether this is still to be expected.
The German banking industry (DK), in which the central associations of the banks unite, does not want to answer any specific questions about this. Just this much: “Banks and savings banks are monitoring the situation on site and taking into account higher needs as far as possible when filling machines,” explains a DK spokeswoman.
However, the first dealers announced on Monday that they had solved the problem. For example, Aldi Nord reported new progress. Card payments will “be possible again in all markets in the short term,” said a spokesman. Payment devices with the problems would be replaced by new models.
“Some of the markets were already converted at the weekend, the rest will follow in the next few days.” And the discounter Netto is also said to have converted its affected card payment terminals. “EC card payment is again possible in the entire branch network of Netto Marken-Discount.”
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