The first week of the new year held an unpleasant surprise for ca. 30 million German shoppers: Their new Eurocheque cards for 2010 were not accepted in most shops. The source of this technical glitch was the software that the French software company Gemalto had printed into the chips of the bankcards. Fortunately, it was soon discovered that the magnetic stripe on the cards was still working perfectly. And by covering the chip with transparent adhesive tape which prevents the the chip being read by ATM and other machines, the customers could make their cards readible again.
In the meantime, banks and other financial institutes have amended their own software for ATMs in order to accept only magnetic stripes and not chips. The bootstrap solution, however, can not be permanent, because it does not work abroad and not beyond the end of their 2010.
How much the failure of the bankcards will cost retailers, customers and financial institutions is still unknown, but experts expect a substantial amount. Gemalto’s CEO Olivier Piou is struggling to avoid punitive action from the German financial institutions. Five percent of his revenue of 1,68 bn. Euros per year come from Germany. It holds 40% of the bankcard software market of 4 bn. Euros. That might change.
