Your Money's No Good Here: Maestro

June, 2021. My wife and I had just arrived in Amsterdam, where I was set to attend Money2020 Europe. For me, this was exciting—not just for the conference itself, but for the chance to see firsthand how another part of the world handled banking, payments, and all things money-related. As someone who had heard snippets from colleagues across the pond, I was eager to immerse myself and learn if this would change how I viewed the U.S. financial system.

But this article isn’t about that conference.

On our first day in Amsterdam, my wife and I decided to pick up some groceries to avoid splurging on stamppot and rijsttafel every night. We found our hotel conveniently close to an Albert Heijn, which, for those unfamiliar with the Netherlands, is the grocery chain of the country (Sorry Jumbo). For my fellow Texans, think of it as the Dutch H-E-B—reliable, good quality, and affordable.

We grabbed a few essentials: bread, cheese (the Europeans do it better), and headed to the self-checkout to avoid any awkward interactions. Even though Dutch people are famously good at speaking English, we figured we’d play it safe. 

I tapped my card to the POS system.Declined. Odd—our card had just worked minutes before. Surely, our bank hadn’t put a hold on it in such a short amount of time.

We headed to a cashier, where an unbothered Dutch teenager scanned our items. I pulled out my Visa credit card, and the moment she saw it, she informed us that Albert Heijn didn’t accept credit cards. Surprised but undeterred, I offered my Visa debit card, only to be met with a frown and a curt, “We don’t accept Visa or Mastercard.”

We were baffled. Did they only accept American Express? Or, God forbid, Discover? Either way, we didn’t have those cards with us. Luckily, we had enough cash on hand to avoid the embarrassment of putting our groceries back, but we couldn’t help but ask: what do you accept? The cashier shrugged and said, “Maestro.”

Maestro: a History

For those of us from the U.S., Maestro might not be a familiar name. In American banking, Visa and Mastercard dominate the scene. But in Europe, particularly in the Netherlands, Germany, Italy, Austria and Belgium, Maestro has long been the go-to debit card system. Interestingly enough, Maestro is a Mastercard product launched in 1991, which quickly became one of the most widely accepted debit cards across the continent. At its peak Maestro had 400 million cards circulating globally.

Maestro is no different from your typical debit card found in the U.S.. Its appeal is also no different than many Americans. Immediate debits and no risk of overspending and racking up egregious sums in interests is appealing to anyone. But the Dutch and northern european’s aversion to credit in general is a whole other league.  The reluctance of using personal credit and lending services, particularly in northern Europe, deserves its own piece entirely. 

So perhaps Maestro’s growth in Europe isn’t best explained by the card users, but by the merchants accepting those payments. For merchants, a major reason for Maestro’s popularity was interchange fees—the fees merchants pay to process card payments. If you happen to be unfamiliar with interchange fees, take a look at this New York Times article where they “uncovered” the business model of credit cards. In Europe, Maestro's fees were much lower than those for credit cards like Visa or American Express, which could range from 1.5% to 3% of the transaction. In contrast, Maestro’s fees were as low as 0.2%. For retailers, this was a big deal. The lower costs meant Maestro was more affordable for businesses to accept, and as a result, debit card payments became the norm for day-to-day transactions across much of Europe. Even debit cards in the US, introduced by Visa in the 90’s, had a 1-2% interchange rate. It wasn’t until the Durbin Amendment in the US in 2010, that capped debit interchange fees for large institutions, that Visa debit was forced to match the interchange rates of Maestro.

For years, Maestro was ubiquitous throughout the EU, particularly for in-person transactions. However, there was a catch—Maestro had limited functionality outside Europe, which could be a hassle for tourists like us. More importantly, as online shopping surged, Maestro began to lose its edge. It wasn’t as well-supported for e-commerce as Visa or Mastercard, making it less practical in an increasingly digital world.

End of an Era

Today, Maestro is being phased out in favor of Mastercard Debit, which offers both the convenience of debit and broader global acceptance. Mastercard Debit is more compatible with online shopping. As this transition unfolds, many Europeans are bidding farewell to a card that was a reliable staple for decades. As a consumer, the transition seems to be seamless. Here in the Netherlands, your Maestro card was automatically swapped for the new MC debit, while merchants appear to accept these new debit cards as if they are Maestro cards.

Furthermore, thanks to the 2015 EU Interchange Fee Regulation, which capped interchange fees for even credit card transactions at 0.3% (someone please think of the poor card companies!), the cost of accepting these other cards has become more manageable for retailers. As a result, Albert Heijn and other major Dutch chains have begun embracing these cards, offering consumers more flexibility in how they pay. This shift mirrors a broader trend in European retail, where international cards are gaining more ground as digital payments continue to grow.

Or is it?

However, even today a few Albert Heijn’s that are franchise-owned have resisted the adoption of Visa cards while only accepting MasterCard Debit. And Albert Heijn, while the most common case, isn’t alone. If you step outside the big box stores and the tourist zones, either have cash or be prepared to be embarrassed that you can’t pay for your 3 Euro pie at the famous 50-year-old bakery (a hypothetical, of course…).  Just a few weeks ago, my wife and I went to pick up packages shipped through UPS. This American company would not accept anything but Dutch bank cards at this Dutch office. (And at the time, we were in the catch-22 of trying to get a Dutch Bank account. But that is a story for another time.)

But there is something interesting about the stickiness of a market incumbent and people’s reluctance to adopt new things, particularly a new payment system. If you’re a Dutch or Belgian bakery whose customer base is 95% locals with local bank cards, why even bother setting up to accept new cards. That’s boring administrative time that could be dedicated to inventing a new cronut. 

In the U.S. we still use paper checks as an acceptable form of payment, something archaic to most of the rest of the world, it seems. But it still works technically. And while today, we have many other ways to pay people, we seem to fall back on what we know. Why is the card formerly known as Maestro any different.