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How post-Brexit bank changes could affect British people in Germany

As the end of the Brexit transition period looms, the UK has so far failed to negotiate access to the European passporting scheme for banks - here's what that means if you are British and live in Germany.

Published: 21 September 2020 16:36 CEST
How post-Brexit bank changes could affect British people in Germany
Photo: DPA

Over the weekend it was reported that, with just three months to go until the Brexit transition period ends, the UK has so far not managed to negotiate a continuation of EU banking rules – known as passporting.

This means that all UK banks will need to apply for new banking licences to provide certain services in each of the 27 different EU countries.

And some banks have apparently decided that this is not worth the hassle in certain EU countries and have begun writing to their British customers registered as living abroad to inform them that they will be closing their accounts or cancelling their credit cards.

READ ALSO: Tell us: Brits in Germany – have you been affected by the closure of a UK account?

Here we take a closer look at the situation for British people living in Germany, and other parts of the EU.

Is it all banks?

No, it's important to be clear that there is no blanket closure of accounts for all Brits living abroad, it depends on who you bank with and the type of account you have.

Essentially applying for new licences will create a lot more admin for banks.

Banks already have to do this for many non-EU countries so clearly it is possible to do. But it seems that some banks are deciding that it's not worth the hassle of doing this for all 27 countries in the EU separately, especially ones where they only have a few customers.

READ ALSO: The complete guide to opening a bank account in Germany

As a country that has a large number of British people living here (estimates vary at around 117,000) there is a good chance that some banks will decided that it is worth their while to negotiate a licence with Germany.

Is it all account types?

No. Again, this depends on the type of account you have, with straightforward current/checking accounts less likely to be closed. It could also be the case that certain products become unavailable – for example our sister site The Local France said many Barclaycard customers in France reported being told that they will no longer be able to use their card.

We were also contacted by a Barclaycard customer in Germany who'd been told a similar thing.

Is it only if I use my German address?

Many British people living in Germany use a 'care of' address in the UK for their banking, for example the address of a family member who will forward on all correspondence they receive.

At this stage it seems that only people who have officially changed their address to a German one are receiving letters from their bank.

Can I challenge my bank's decision?

Banks are free to decide what products they offer and to who, but their decisions can be challenged via the Financial Ombudsman Service – find out more about the procedure to file a complaint here.

The UK government told British newspaper The Times that “the provision of banking services is a commercial decision for firms based on a number of factors” so Brits living in the EU probably shouldn't hold their breath for any help from that direction.

READ ALSO: OPINION: 'All certainly has vanished' for British citizens living in Europe 

Which banks?

Here's a look at what we know so far. We'll update this as we get more responses from banks.

Santander – the Spanish banking giant said it was keeping the situation under constant review but told The Local: “We have no current plans to close any of our retail [personal banking] or corporate accounts.”

Lloyds – the bank is understood to be closing business accounts – not personal accounts – of customers living in the Netherlands, Germany, Ireland, Italy and Portugal.

A spokesman said: “We have written to a small number of customers living in affected EU countries to let them know that due to the UK's exit from the EU, regrettably we will no longer be able to provide them with some UK-based banking services. We want to keep customers informed and offer advice on next steps.”

Barclaycard – some readers of The Local France and The Local Germany have been in touch to say that they had received letters from Barclaycard telling them that their account would be closed. Barclaycard is separate to Barclays bank and it is understood that Barclays current accounts are not affected, although the company has not commented on the record so far.

What's next?

Understandably, this has caused real worry among British people abroad. We'll report on this more as we get more information. But feel free to share your experiences or concerns by emailing us: [email protected] or filling out this form.

BANKING

Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Published: 13 February 2024 12:31 CET
Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

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