A date representation software bug, the kind that didn’t hit in the year 2000, has caused problems for holders of millions of German credit card and automatic teller machine cards.

The German Savings Banks and Giro Association (DSGV) has issued a statement (in German) outlining that the problem hit as German card users tried to conduct transactions in the New Year. According to DSGV some 20 million ATM cards and 3.5 million credit cards are affected.

The card holders are being advised to carry cash as well as their cards in case the cards do not work. But as in most cases they need the cards to get cash from ATMs the advice could be seen as problematic.

Gemalto NV (Amsterdam, The Netherlands), the descendent company of chip-in-card pioneer Gemplus, more or less confessed to being responsible for the problem when it said that it is a major supplier to German banks and has been working on investigating and fixing the problem since it first came to light on Sunday (Jan. 3).

Oberthur Technologies SA (Levallois-Perret, France) said that cards that it had manufactured were not impacted and continue to function normally. Banking cards with chip modules from Giesecke & Devrient GmbH are also working properly. “No card with a G&D chip module has caused any difficulties at ATMs or points of sale,” the compay said, in a statement.

Gemalto said it is working with German banks to develop a “corrective process” that would avoid the replacement of the affected cards and that some of the cards are now being accepted by ATMs and point-of-sale terminals. Gemalto payment cards issued for other countries are not affected, the company said.

“We are fully focused on minimizing the inconvenience for the cardholders. As a partner, we will of course meet our contractual obligations, and continue to support our clients,” said Olivier Piou, chief executive officer of Gemalto, in a statement. “We trust that we will promptly deploy a solution with our German customers to return to full normal operation.”

Some estimates have put the cost of replacing the cards at up to $350 million, depending on how many cards must be replaced. It is not yet clear how much compensation German banks and Gemalto will be liable for because of the bug.

Gemalto is a major supplier of chip-in-card products, such as subscriber identification modules (SIM), Universal Integrated Circuit Card (UICC) in mobile phones, smart banking cards, smart card access badges, electronic passports, and USB tokens for online identity protection, to governments, wireless operators, banks and enterprises. The company had 2008 annual revenues of 1.68 billion euro (about $2.4 billion).

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