The agreement, which is part of a move towards the realization of the Single Euro Payments Area (SEPA), will, for the first time, allow more competition within the co-branding of debit card programs for European payment card organizations.

The introduction of V Pay, which Peter Ayliffe, president and CEO of Visa Europe, has hailed as the first card specifically designed to meet the needs of SEPA, will provide competition for Volksbanken and Raiffeisenbanken (VR-BankCards).

As representatives of the cooperative banking group, DZ Bank and WGZ Bank, along with technical partners CardProcess, DG Verlag, GAD and Fiducia IT, will be the first to open up their technical card payment processing to enable the issuance of V Pay.

Mr Aylifffe commented: This is a truly historic decision for payments in Germany and in Europe. The agreement underlines the fact that V Pay meets the needs of German banks in their move towards SEPA. We are convinced that other banking groups will follow the lead of the cooperative banks.

According to Visa, after its initial introduction, the first mass issuing of V Pay cards in Germany will occur during 2008.

Visa Europe established a V Pay steering committee earlier in 2006 and a V Pay Deutschland board has also been established to enable local management of V Pay in Germany.