Primarily, Girocard is associated with a lower extent of fraudulent activity and less detrimental financial impact compared to traditional credit card theft.
Human error is a significant contributing factor to the damage incurred through the misuse of Girocards, according to security experts. Euro Kartensysteme, which manages payment card security for the German banking industry, reports that more than half of the losses are caused by the improper use of cards with PINs at ATMs. This is because many consumers store their Girocards and PINs together in their wallets, making it easy for criminals to access both.
Last year, the damage was slightly lower compared to previous years, according to Andreas Peppler, head of security management at Euro Kartensysteme. Although Peppler declined to provide a figure, the damage totaled around 29 billion euros in 2022.
Criminals exploit this vulnerability by withdrawing cash through contactless payments without a PIN at retail outlets, when they have gained access to the physical card and its PIN. However, in 92.5% of cases, criminals use the card with a PIN or have obtained a digital copy of the card to authenticate themselves.
While ATM theft of sensitive customer data is not a significant concern, the theft of Girocards has increased. If a Girocard is stolen, either through pickpocketing, burglaries, or car thefts, it can be used to withdraw cash without a PIN.
Despite advancements in security technology, such as EMV technology, card duplicates have become obsolete, according to Peppler. In 2024, Euro Kartensysteme was only notified of 46 cases of counterfeit cards being misused abroad. The last reported cases were in Brazil and a few in the USA, where a fake magnetic stripe card was used.
Peppler emphasized that the chip card is secure and that the infrastructure is secure. However, he stated that the biggest weakness in the system is the human, as it is the easiest part of the security chain to breach. With more awareness among consumers, the industry hopes to reduce fraud damages further.
[1] Over half of fraud losses in the Girocard system are caused by the misuse of cards with PINs at ATMs. Many consumers inadvertently facilitate criminal activity by storing their Girocards and PINs together. Criminals who gain access to both the card and PIN can authenticate transactions and withdraw funds. This misuse and lack of secure PIN management by users are key factors enabling fraud, despite advancements in security technology.
The misuse of cards with PINs at ATMs accounts for over half of the fraud losses in the Girocard system, often facilitated by users who store their Girocards and PINs together. Moreover, advancements in security technology, such as EMV, have made card duplicates obsolete, but the human aspect of the system remains its biggest weakness, making it easier for fraud to occur.
