German banks should be able to reprogram roughly 30 million defective bank cards through automated teller machines to avoid the cost of replacing them all.

A full exchange of the defective cards, which are unable to process the date 2010 and stopped working when the new year began, would cost up to $432 million, a person familiar with the matter said.

Reprogramming would cost "substantially less"; lawyers will have to decide whether the banks or card manufacturers are liable for the costs.

Gemalto NV, a French technology firm and payment card manufacturer, said Wednesday that it is working to avoid exchanging faulty cash and credit cards in Germany.

The person familiar with the matter said the problems affected only one software manufacturer.

Gemalto said it is a "major supplier to German banks" and that "Gemalto and the German banks are actively developing together a corrective process that avoids the replacement of the affected cards in Germany."

"We are fully focused on minimizing the inconvenience for the cardholders," said Chief Executive Officer Olivier Piou. Gemalto will "of course meet our contractual requirements" and "will promptly deploy a solution with our German customers to return to full normal operation," he said. Gemalto said the problem did not affect payment cards issued for other countries.

Bank cards from two other large smart card manufacturers in Germany, Giesecke & Devrient GmbH and Sagem Orga GmbH, a unit of Safran SA's Sagem Securite, were not affected by problems stemming from the year change, the manufacturers said Wednesday.

Oberthur Technologies SA, another large producer of smart cards, said that "banking cards produced by Oberthur Technologies and issued in Germany or elsewhere are not impacted and function normally."

A spokesman for the chip manufacturer Infineon AG said Wednesday that it provides only the chip technology for bank cards and not the software.

The software bug linked to problems processing the date 2010 has affected holders of about 30 million, or about 30%, of German cash and credit cards since the start of the new year, according to data made available Tuesday from the country's three largest banking associations. Cardholders were not able to use ATMs nor point of sale terminals in Germany and abroad. Though the ATM problem has largely been fixed in Germany and German point of sale terminals should accept the cards by Monday, card transactions abroad still pose difficulties.

The failures mainly affected holders of bank cards issued by public-sector savings banks and cooperative banks.

But customers of Deutsche Postbank AG and Commerzbank AG were also hit.

Customers of Deutsche Bank AG were not affected, a spokeswoman reiterated Wednesday.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.