As of July 7, 2016, Apple Pay is live in Switzerland. moneyland.ch answers the big questions here.
How do I use Apple Pay to make payments?
You can make payments by placing your iPhone or Apple Watch directly on a payment terminal. The transaction is made using near field communication (NFC) contactless technology. You verify the payment via a finger-print scanner (Touch ID). If for any reason the Touch ID function does not work, you can also verify a payment by entering your pass code. You don’t need to open an app to make a payment.
So far, Apple Pay compatible devices include the iPhone 6s, 6s Plus, 6 Plus and SE, as well as the Apple Watch (in combination with an iPhone 5 or newer). Only in-app payments are available on (newer) Apple iPads.
Contactless card payments without verification (by entering a PIN, for example) are currently limited to 40 francs per transaction. Transactions larger than 40 francs can only be made using a PIN or another form of secure authentication. Apple Pay requires fingerprint authentication regardless of the size of a transaction. Because of that requirement, a card may be the faster solution for contactless payments of 40 francs or less.
What do I need in order to use Apple Pay?
In order to use Apple Pay, you need to have a regular credit card or pre-paid credit card issued in Switzerland or by a foreign card issuer which is an Apple Pay partner.
The credit card company must have a partnership with Apple in order for you to use the card with Apple Pay. You can add your credit card details in your Apple Pay account.
Americans have been able to use their iPhones to make payments from their US credit cards at contactless terminals in Switzerland since Apple Pay’s launch in the US over a year ago.
You can easily find out which Swiss payment cards work with Apple Pay by applying the “Apple Pay” filter in the moneyland.ch credit and prepaid card comparison.
Which credit cards work with Apple Pay?
In Switzerland, Apple Pay will initially accept Visa and MasterCard credit cards.
However, only Cornèrcard, Bonuscard, Swiss Bankers and Swisscard have partnered with Apple Pay so far. In the future, additional credit card issuers may hop on the bandwagon if Apple’s many Swiss fans latch onto the digital wallet.
Where can I use Apple Pay to make payments?
According to MasterCard, there are currently around 100,000 NFC-enabled payment terminals in Switzerland. That means you can use Apple Pay at approximately 60 percent of all payment terminals in the country. Contactless payments are also accepted by at least some terminals in 77 countries worldwide.
Apple Pay is also expected to extend payment services to the internet, which means you may soon be able to use Apple’s Safari browser to make seamless online payments through Apple Pay.
Just note that using Apple Pay to pay outside of Switzerland or to make online payments can hit your wallet hard. The main culprits here are the high foreign transaction fees charged by credit cards.
How much does using Apple Pay cost?
You as a consumer pay the same fees you would pay to use your credit card without Apple Pay. These fees are set by your card’s issuer. You also earn credit card rewards, if your card offers these, just as you would with normal card use. Apple does not charge you as the Apple Pay user.
What you should watch out for are the foreign transaction fees charged when you make payments abroad, and the surcharges for credit card payments added by many merchants in Switzerland.
Merchants which accept Apple Pay will pay the same merchant fees they pay when you use a credit card to make a purchase.
Is Apple Pay a secure payment option?
The contactless payment process used by Apple Pay is relatively secure. The payment terminal generates a unique security code for every transaction, and this code is then sent to your credit card company. Additionally, a finger-print scan or a pass code is required for each payment.
But like every payment method, Apple Pay has its Achilles’ heels. For example, stolen credit card information could possibly be used to open a fraudulent Apple Pay account.
What about privacy protection? Apple claims that it does not save personal transaction data. But you can view recent purchases right in the app, and it’s fair to say that Apple can track locations and timings of purchases and other transactions.
What are the benefits of using Apple Pay?
Apple Pay is not widely used, but NFC payments are accepted by some merchants in 77 different countries. iPhone users enjoy a more user-friendly experience than that offered by third-party mobile wallets like Twint.
Apple is known for its user-friendly products, and because it also manufactures its own hardware, it can easily integrate an app into its ecosystem. In the long-term, it may eventually become even more user-friendly than cards or cash, because many consumers have their phones close at hand, while using a card or cash normally involves reaching for your wallet.
What are the negatives to using Apple Pay?
The biggest downside: Apple Pay can only be used with Apple devices, and even then, its use is limited to the latest models. Additionally, many payment terminals are not currently NFC compatible.
The fact that only a handful of credit card issuers are currently interested in partnering with Apple Pay means you are pretty limited in your choices. Most Swiss credit cards are not Apple Pay compatible as of yet.
Where data protection is concerned, you may or may not be ok with the idea of offering free access to every detail of your financial life to one of the world’s largest tech and data collection companies, which also happens to be based outside of the country. Cash, on the other hand, provides a simple and completely private payment method.
How’s it better than third party apps like Twint?
Paymit and Twint can be used with many different devices, and do not require you to enter your sensitive credit card information.
How user-friendly upcoming releases will be remains to be seen.
The problem: Unlike Apple Pay, which integrates seamlessly with new iPhones, third-party solutions like Twint require that you open an app.
A two-second difference in the time it takes to process a transaction might be enough to give Apple Pay or Android Pay an advantage over other apps.
Should Swiss banks and credit card companies be worried?
Mobile payments will continue to play a very marginal role in Switzerland in the foreseeable future, Apple Pay included. Cash, debit and credit cards will remain the most important forms of payment.
Still, concern over Apple Pay and attempts by other tech companies like Amazon and Google to gain a hold on your wallet are not unfounded. Down the line, tech giants turned cross-industry titans may be able to take advantage of their huge customer-bases to challenge longstanding financial service providers.
Apple already demands a portion of interchange fees for each transaction made using Apple Pay, which cuts into the profits of banks and credit card companies.
Issuers that partner with Apple Pay hope that offering the service will help them attract and keep customers.
Credit cards: compare now and filter for Apple Pay cards