Apple Pay and Google Pay: Swiss Banks Rethink Their Strategies

Initially, the incursion of Apple Pay, Samsung Pay and Google Pay into the Swiss financial sector was not warmly received by the majority of Swiss banks and card issuers.

Initial hesitance

“Many Swiss banks see global tech giants as potential competitors in the financial services space,” says moneyland.ch CEO Benjamin Manz.

It is therefore understandable that Swiss banks initially tried to slow the incursion of tech giants into the Swiss financial sector while promoting their own Swiss mobile payment service Twint.

The history of Apple Pay in Switzerland provides a good example. Apple Pay has been available to Swiss consumers since 2016, but in the summer of 2016, Apple only counted Cornèrcard, Bonuscard and Swiss Bankers as Swiss partners.

Until April 2019, not one of the eight interregional Swiss banks UBS, Credit Suisse, Raiffeisen, Zürcher Kantonalbank, PostFinance, Valiant Bank, Migros Bank and Bank Cler had partnered with tech giants to enable Apple Pay, Google Pay or Samsung Pay.

2020 brings broad acceptance of foreign payment solutions

Things have changed since then. Credit cards and prepaid cards from nearly all Swiss banks now support the mobile payment solutions from Apple, Samsung and Google,” observes moneyland.ch telecom expert Ralf Beyeler.

PostFinance is the main exception. Up until now the Swiss postal bank has ignored global tech giants, backing Swiss mobile payment solutions Twint and Swatch Pay instead (refer to the comparison table available at the foot of this report).

Apparently, Swiss banks have been forced to reconsider their strategies. Many Swiss banks are now of the view that resisting Apple, Google and Samsung is more damaging than accepting them.

“An additional factor in the equation is that neobanks like Neon, Revolut and TransferWise pose a more immediate threat than tech giants like Apple,” says Manz. “The new app-based banking services compete with existing banks much more directly than tech giants currently do.”

Major Swiss bank UBS, for example, has responded to competition from neobanks by announcing the launch of new credit cards with more favorable currency exchange rates. “More adjustments to products from Swiss banks will follow,” says Manz.

Apple Pay & Co. and no-annual-fee Swiss credit cards

Credit cards without annual fees are exceptionally popular in Switzerland. The Cashback credit cards from Swisscard became the first no-annual-fee credit cards to be enabled for use with Apple Pay in 2018.

The Migros Cumulus Mastercard from Cembra Money Bank and the Coop Supercard credit card from TopCard (UBS) were only enabled for Apple Pay in 2020.
All three of these credit cards also support Samsung Pay. Google Pay is supported by the Cashback credit cards from Swisscard and the Coop Supercard credit card.

Mobile payments and neobanks

Neobanks are stirring the Swiss financial services sector. As part of its analysis, moneyland.ch looked at which mobile payment solutions the neobanks which are most popular in Switzerland offer.

Popular neobanks include Swiss app-based banking services Neon and Zak (Bank Cler) and UK service providers Revolut and TransferWise.

Zak (with cards issued by Cornèrcard) is the only app-based banking service to offer Apple Pay, Google Pay and Samsung Pay compatibility. Cards from UK financial services providers Revolut and TransferWise issued to Swiss consumers can be used with Apple Pay and Google Pay, but not Samsung Pay. “Swiss neobank startup Neon has recently enabled payments with Samsung Pay,” states Ralf Beyeler.
Mobile payments via smartwatch

In addition to mobile phones, many smart watches and other wearables can now be used to make payments. Swiss watchmaker Swatch offers its own mobile payment solution for use with some of its watches. Sporting device manufacturers Fitbit and Garmin also offer their own mobile payments solutions. Apple Watches are compatible with Apple Pay.

Some Swiss card issuers supported Fitbit Pay and Garmin Pay before they added support for Apple Pay. But even so then, use of these payment solutions remains marginal, as the 2020 Swiss Payments Survey by moneyland.ch shows.

Twint is more popular in Switzerland than Apple Pay

The Swiss mobile payment solution Twint works differently to Apple Pay and many other mobile payment solutions. A credit card is not essential because Twint can also be linked to a bank account or used on a prepaid basis.

Twint is already surprisingly popular, as the 2020 Swiss Payments Survey by moneyland.ch shows. A high 38% of survey participants have used Twint to pay for purchases. by comparison, 10% have used Apple Pay, 9% have used Google Pay and 7% have used Samsung Pay.

Figures are significantly lower when only users who use mobile payments on a frequent basis are accounted for, with 7% using Twint often. Only 3% use Apple Pay frequently, while Google Pay and Samsung pay are used by just 2% of consumers on a frequent basis.

More on this topic:
Interactive Swiss credit card comparison