Mastercard discontinues Maestro in Europe

Mastercard has announced that it will discontinue Maestro in Europe in mid-2023. This is likely to have enormous implications for the German banking industry: The classic Girocard can only be used abroad thanks to a Maestro badge (or one from Visa’s competitors).

Cessation officially announced

In the recent past, there had already been speculation about a possible discontinuation, as Maestro’s market share has been declining in favor of debit mastercards. Now the company has officially announced its intention to stop issuing corresponding cards in Europe in mid-2023. However, cards issued until then will continue to function until the end of the card’s term – i.e., until 2027 at the most. However, it is to be expected that banks, retailers and ATM operators will significantly reduce support for the system earlier in the event of a foreseeable discontinuation in order to strengthen possible alternatives.

Mastercard is probably speculating on strengthening its own market power by discontinuing Maestro. The company merely cites changed market conditions as the reason for the discontinuation; in fact, European and especially German banks are largely dependent on Mastercard and Visa, since all payments made abroad are processed via these two providers. Without Maestro, this will no longer be possible with Mastercard, so many banks may be forced to issue debit Mastercards instead of girocards from now on. This in turn would benefit Mastercard financially. Should Visa also discontinue its V-Pay service, which at least finanz-szene.de suspects, there would be a complete dependence on debit cards from the two companies.

European alternative?

However, it is likely that banks will not give up the card market to Mastercard (and Visa) without a fight. One possible alternative to a complete or widespread move to debit cards is to push the European competitor product through the European Payment Initiative. This is a project that aims to build a European competitor to Mastercard and Visa, which dominate the card and payment market. However, it is unclear to what extent the banks are prepared to invest billions in order to achieve success. The business is unlikely to become profitable until well after the investment and development phase, which does not guarantee a successful outcome.

Another solution that would keep the banks in the card business is already being pursued by some savings banks: they issue combined savings bank debit master cards that combine the functions of the conventional checking card with those of the debit credit card.