The 2.6 million Postfinance customers in Switzerland experience time and again in everyday life that their card is not accepted: in particular, new providers of card reading devices such as Sumup reject them. The Post subsidiary is now reacting to this.
More and more new payment solutions are coming onto the market in Switzerland.
Simon Dawson / Bloomberg
«Please no Postcard», says the man at the reception of the Herberge See Rorschach and points to a small sign with the payment options that his establishment accepts. Then he holds out a card reader from Sumup, on which the guest pays the bill with a credit card. Postfinance customers who stay overnight in smaller accommodations in Switzerland, shop at retailers or want to eat something at a snack bar often experience that their card is not accepted. This is widespread in Switzerland. Postfinance has 2.6 million customers and a total of around 2.9 million Postfinance cards are in circulation, says Rinaldo Tibolla, spokesman for the financial institution.
New providers reject Postfinance cards
Meanwhile, new providers of card readers developed for retailers and small businesses are on the advance. A taxi driver, a pizza courier or the operator of a market stall can also accept card payments. The bank card readers from the new providers such as Sumup are considered to be cheaper than the previously widespread solutions from companies such as Worldline or Nets. “The established providers are too expensive for micro and small businesses, that is, businesses with comparatively little turnover,” says Tobias Trütsch, payment economist at the University of St. Gallen (HSG). In the case of lower sales, the costs for such terminals are disproportionately high.
At the same time, the entrepreneurs must In order to be able to serve all of their customers, increasingly offer electronic and mobile payment options. This is made possible by a so-called mPOS (Mobile Point of Sale). This can either be a smartphone or a device that is paired with one. After all, cash is no longer the most widely used means of payment even in the «cash country of Switzerland», as a study published in August this year by the Zurich University of Applied Sciences and the HSG showed.
The consumer wants to have a choice
Another reason Trütsch mentions are the technological possibilities: “The new providers enable complete mobile payment, all that is needed is a mobile phone network,” says the HSG representative. Furthermore, the new providers offer “Payments as a service” solutions. This includes the shop connection, the till connection and the entire package of software solutions.
How can you explain why many small dealers do not accept the Postfinance card? “Up until the end of 2020, this was mainly due to the fact that a retailer needed a postal account so that customers could pay with the Postfinance card,” says Trütsch. This has deterred many providers. However, Postfinance has been dispensing with this “account requirement” since the beginning of this year.
According to Trütsch, however, another problem is that the technical requirements of the Postcard debit card system are currently not compatible with providers such as Sumup. The costs are probably too high. Malik Khalfi, head of the payment terminal provider Be-Cash from western Switzerland, confirms this. The business model of his company also consists of offering payment terminals to small companies that could not previously afford this.
Postfinance card from 2022 with Debit Mastercard
“With regard to the acceptance of the Postfinance Card, the retailer always decides which payment methods he would like to offer,” says Postfinance spokesman Tibolla. “The card devices from international providers such as Sumup only accept international cards such as Mastercard and Visa and finance the devices through higher fees that the merchants pay per transaction,” he says.
Postfinance will probably become the Postfinance Supplement the card with the Debit Mastercard. “With this combined card, customers will be able to pay at even more points of sale in Switzerland and abroad,” says Tibolla. The higher merchant fees for Debit Mastercard compared to the Postfinance Card fees would be paid by the merchant and not by the consumer. The Sumup devices would accept the “new” cards from Postfinance, says Vera Pershina, Growth Manager for Germany, Switzerland and Austria at Sumup. Switzerland has its own Default
The previous problems with the acceptance of the Postfinance card are also related to a Swiss standard that not all terminal providers support. As Marianne Bregenzer, country manager at the payment service provider Nets Schweiz, explains, Switzerland has its own EP2 standard for payments with debit and credit cards at the point of sale and in e-commerce. According to Bregenz, the Association Technical Cooperation EP2, consisting of the card companies based in Switzerland and the Association for Electronic Payment Transactions, is responsible for the maintenance and further development of the standard.
Khalfi criticizes this as being out of date. The original idea of the standard was to create more security. Today it is a relic, a «Swiss Finish».
The previous non-acceptance of the Postfinance card at Sumup terminals comes from the fact that these payment devices only accept international cards and go directly to an international acquirer – a contractual partner of the merchant for the payment of card transactions. are bound, says Tibolla. Sumup would be free to integrate the EP2 standard, but the company decided against it.
Cheaper for dealers
Trütsch does not believe that the Postcard will lose its importance as a means of payment. It is too widespread for that. In addition, its attractiveness will remain high, as it will soon have the same functions as the debit cards from Mastercard and Visa. In addition, the costs of the Postfinance card are lower for the merchants compared to those with Maestro, V-Pay or Debit-Mastercard, he says.
However, it could be a solution for Postfinance to join the Mastercard / Visa network and give up its own debit card system, says Trütsch. Then the card could be used worldwide. As a retailer, you currently have to proactively register for the postcard if you have a SIX terminal, for example, says the HSG representative.
“Giving up the own debit card system would have dramatic consequences for Swiss trade,” says Tibolla. It would increase the cost of trading by tens of millions. Postfinance therefore sees it as an economic responsibility to maintain the debit card system. “Many European countries that have given up their local debit card systems envy our situation,” says the Postfinance spokesman.
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