Swiss merchants want Twint, and we know why

The Swiss Retail Federation association considers that Twint abuses its market leader position by maximizing its costs.Image: FABRICE COFFRINI / AFP

Volg, Manor, Aldi & Co. attack Twint: the Swiss payment application would require too high fees. What’s behind it? Here are the main questions, and their answers.

Pascal Michel, Stefan Ehrbar / Ch Media

“Can you twect me?” Ask this question abroad, and you will certainly receive puzzles. In Switzerland, however, everyone understands what you mean. From the pandemic, the TWINT payment application has been a remarkable success.

It has not only become the reference for simple money transfers with friends. Twint has also been established with large distributors, farm shops and flea markets. But its growing influence is increasingly aroused criticism.

More expensive than credit card payment? Swiss merchants criticize Twint.Image: Keystone

Why this sudden opposition to Twint?

The Swiss Retail Federation association, which represents companies like Manor, Ikea or Aldi, has filed a complaint against Twint with the Competition Commission (COMCO). He is criticized for that the costs taken are “regularly as high, even higher, as those of credit cards”.

According to the association, they should however align themselves with those of payments by debit card. Indeed, most TWINT customers, as for a debit card, associated the application with a bank account.

The association does not give specific figures on these allegedly excessive costs. The calculations carried out by the Switzerland at the weekend However, show that reproaches do not apply in all cases. It is important to distinguish the payment method and the supplier.

What costs Twint in stores, bars?

It depends on different factors. Concretely, you have to look at the device used, that is to say the terminal, its supplier, called buyer, and the subscription model.

If, as a trader, you use a postfinal terminal, you must pay 1.3% of the amount requested, and at least twelve cents, when a customer pays with Twint. For comparison, the use of a debit card is billed at 1.2% and that of a credit card at 1.5%. In both cases, the minimum amount is also twelve cents. For a purchase of fifteen francs, the store must therefore sell 19.5 cents if the customer uses Twint. If the customer pays with a debit card, the merchant will only pay “18 cents”, while with a credit card, he will pay 22.5 cents.

At the Wallee terminal supplier, Twint is cheaper than most cards. Traders who choose the Business subscription to 70 francs per month pay twelve cents per Twint transaction, plus 1.3%. For a five -franc coffee, that is 18.50 cents. The same conditions apply to Wallee for PostFinance debit and credit cards.

Mastercard and visa debit and credit cards are however more expensive (twelve cents plus 1.55%), and for a transaction with an American Express card, it is even necessary to count twelve cents plus 1.95%.

People who buy a terminal from the Worldline supplier pay 1.7% per transaction plus 10 cents, whether made with Twint, a credit or debit card or Apple or Google Pay.

Traders can also use a QR code for Twint, which must be scanned by customers. These QR stickers can be obtained directly from Twint. In this case, Twint payments are not integrated into the terminal counting systems. With this solution, the costs amount only to 1.3% of the amount of each transaction.

The assertion that Twint generates higher costs that debit or credit cards is therefore not true for most standard buyers. However, traders with a very high volume of transactions often get better conditions, which are not disclosed. It is quite possible that they pay less for the use of credit cards or debit than for Twint.

What costs for Twin online?

It is impossible to answer this question in general. It depends on the software and payment provider that traders use for their e-commerce store.

At Payrexx, one of the largest online payments suppliers, a merchant with the premium subscription pays 1.25% plus 18 cents per transaction in his digital shop. It is less than for Mastercard and Visa credit and debit cards (1.35% plus 18 cents) and less than for the acceptance of postfinance cards (1.5% plus 20 cents).

The American service provider Stripe, particularly appreciated by small traders, takes 1.9% more 30 cents for payments by Twint. This amount is lower than that of credit card and debit payments from Switzerland (2.9% plus 30 cents). For example, the one who sells a product for 50 francs must pay 1.25 francs to stripe if the customer pays with Twint, and 1.75 francs in the event of payment by debit card.

The use of the American system Paypal is much more expensive. Whoever has a merchant account at Paypal must pay 3.4% plus 55 cents per transaction. Depending on the type of integration, additional costs may apply.

What do merchants complain about?

The Retail Federation criticizes the application for abusing its relative power on the market. Twint knows that traders cannot do without its much appreciated payment function, it is explained to the Swiss Retail Federation. The company would benefit from this dependence and maximize the costs.

Indeed, with five million users, TWINT has become a truck on the payment market. Even at the market and in the farm stores, customers can pay by Code QR. The success of Twint puts merchants under pressure, says Swiss Retail Federation, because “customers expects to be able to use Twint” at all times.

Comco will now examine the complaint. This is the first time that the competition authorities have been looking into detail on the costs carried out by Twint.

Does the popularity of Twint change in Switzerland?

Twint was launched in the fall of 2016, following a fierce fight for market domination. Postfinance had already launched the precursor of Twint. UBS, the Cantonal Bank of Zurich (ZKB), Six and Swisscom have competed for customers with their Paymit offer. Finally, the two competitors have merged and have since arisen under the name of Twint. Today, the company belongs to the Cantonal Bank of Vaud, Postfinance, Raiffeisen, UBS, ZKB as well as six and Worldline.

From the covid pandemic, the application has imposed itself in daily life. The Swiss Retail Federation even speaks of “Chouchou of everyone”. This is also explained by free for individuals. What we often forget: traders, they pay fees for each transaction.

An alternative to Twint for individuals?

Since August 2024, most banks in Switzerland also offer what is called instant payments. These make it possible to transfer money between bank accounts in a few seconds via the E-Banking application.

The reception of instant payments is free in most establishments, but, for the sending of money, many invoice between two and five francs per payment. This is why this method has not (yet) managed to establish itself as an alternative to Twint.

Visa and MasterCard also in the viewfinder

Visa and MasterCard financial groups are also in the crosshairs of merchants. Recently, more than 36 Swiss merchants, including Coop, Derour, Edelweiss, Selecta or Swiss, filed a complaint against the two companies with the Commercial Court of the Canton of Zurich.

Traders criticize the two companies for setting an “illegal and excessive” interchange commission in recent years. They now require retroactive reimbursement for the last three years. The value of the dispute amounts to 142 million francs.

The Interchange Commission is deducted from each payment by card and is donated to the banks that emit them. Visa and Mastercard do not take advantage of them themselves. However, it is they who fix the amount of this commission in the complex transaction system. From the point of view of traders, Visa and Mastercard are therefore responsible for the economic damage.

Visa considers that the complaint is “bottomless” and declares that it will defend itself:

Comco has already managed to obtain a new drop in costs at Mastercard. Visa negotiations are still underway.

Translated and adapted from German by Léa Krejci