Money-earning solutions might still be limited, but there has never been as many ways to spend money as there are today. New technologies have led to the creation of numerous new payment methods and many consumers find it difficult to keep up with – much less understand – the payment services at their disposal. This guide from moneyland.ch explains the benefits and disadvantages of the most widely used payment methods. You can also request a free, detailed comparison chart as a PDF by email.
Cash is the most widely accepted means of payment, and transactions do not require third-party services. However, you are limited to using currencies which merchants are willing to accept – typically the national currency and possibly one or more additional major currencies (U.S. dollars or euros, for example).
Credit cards can be used to settle payments in many countries, but some payment networks are accepted by more merchants than others. On a global level, Visa and Mastercard are more widely accepted by American Express and Diners Club – but acceptance of individual payment networks also varies on a country-by-country basis.
Acceptance of debit cards is more sketchy. V Pay cards from Visa can only be used to settle payments at merchants in Europe which accept Visa cards. Maestro cards are accepted worldwide at point of sale terminals which accept Mastercard – unless a credit card is specifically required for a transaction (as is often the case with car rentals). Postfinance debit cards are widely accepted by merchants within Switzerland, but while they can be used to withdraw cash at ATMs running on the EUFISERV and PLUS networks, they cannot be used to settle payments at point of sale terminals outside of Switzerland.
Apple Pay can be used to settle payments at point of sale terminals which accept contactless payments, both in Switzerland and abroad. While many point of sale terminals in Switzerland include contactless technology, acceptance in many other countries is very limited. Samsung Pay can be used to settle payments at both contactless terminals and at most point of sale terminals which accept magnetic stripe cards – making it far more widely accepted than Apple Pay.
Credit cards – particularly those using the largest payment networks – are the form of payment which is most widely accepted by online merchants. Prepaid cards are accepted by many – but not all – of the online merchants which accept credit cards. The use of prepaid cards can also be limited based on the type of purchase being made (ongoing subscriptions or car rentals, for example), which may require payment by credit card.
Maestro and V Pay debit cards are not widely accepted by online merchants. Many Swiss online merchants accept the Postfinance debit card, but it is not accepted by online stores outside of Switzerland.
Online acceptance of Apple Pay and Twint is very limited. Direct cash payment solutions like Barzahlen and bob pay are not yet widely offered by Swiss online merchants, but most provide the option of paying via deposit slip.
Annual fees compared
The annual card fees charged for Swiss credit cards range between 0 Swiss francs (for the cheapest cards) and 850 Swiss francs (for platinum cards). Annual fees charged for prepaid cards and debit cards range between 0 francs and 60 francs.
Apple Pay, Samsung Pay and Fitbit Pay do not have annual fees. You pay the annual fees applicable to the credit card or prepaid card which you link to the mobile wallet.
Local transaction fees
Typically, payments made in Swiss francs at Swiss merchants are free of charge, regardless of whether you pay in cash or via a debit card, credit card or prepaid card. However, some merchants add surcharges for credit card payments due to the high processing costs.
When you make Swiss franc cash withdrawals in Switzerland, there are a few things to consider. Avoid using credit cards or prepaid cards to get cash at ATMs, as high cash advance fees (minimum 5 to 10 francs per withdrawal) apply. When using a debit card to withdraw money, make withdrawals at ATMs operated by the same bank which services your account – as these are free of charge. Some Swiss banks charge out-of-network ATM fees (typically 2 francs per withdrawal) when you use your debit card to withdraw money at ATMs operated by other Swiss banks.
Foreign transaction fees
It is important that you understand the fees you pay when you make purchases in a foreign currency or outside of Switzerland. Firstly, each payment service provider uses their own exchange rates for converting currencies. Secondly, each service provider sets their own foreign transaction fees.
When you use a Swiss credit card to settle payments in a foreign currency, you pay a foreign transaction fee of anywhere from 1.2% to 2.5% - depending on the credit card you use.
When you use debit cards like Maestro and V Pay cards to pay in a foreign currency, most Swiss banks charge a foreign transaction fee of 1.50 francs per purchase. Some charge a higher fee (up to 2.50 francs). A few Swiss banks charge an additional foreign transaction fee based on a percentage of the transacted amount.
When you use Apple Pay or Samsung Pay to settle foreign currency transactions, you pay the foreign transaction fee charged by the linked credit card or prepaid card. You do not pay an additional fee.
Always avoid withdrawing money using credit cards while traveling outside of Switzerland. When you withdraw money at foreign ATMs using a credit card, you pay both cash advance fees (typically 10 francs per withdrawal) and foreign transaction fees. A debit card is a better choice for withdrawals at foreign ATMs, as you pay a much lower fee (typically 5 francs). The Postfinance Private Account Plus does not charge a fee for cash withdrawals at foreign ATMs.
Contactless payment authentication
Contactless payments made using credit cards and debit cards require PIN authentication when the amount transacted exceeds 40 Swiss francs. Contactless payments using Apple Pay must be authenticated via touch ID, PIN or face ID verification regardless of the amount transacted. Samsung Pay requires a finger print scan or a PIN. Fitbit Pay requires a PIN. Twint connects to point of sale terminals (Twint beacons) via bluetooth or QR codes, and a PIN is required to open the Twint app.
Pros and cons of cash
Cash is the most popular payment method in Switzerland. The biggest benefits of using cash are anonymity and independence of third-party service providers. While payments made using payment cards and mobile wallets are recorded by the service providers which manage the settlement of payments, using cash to pay does not generate data about your spending habits. Because cash transactions do not require the approval or service delivery of a bank or tech company – cash is the most reliable payment method.
Possible disadvantages of cash include hygiene – as coins and banknotes may be physically handled by many different people – and its relative vulnerability to theft and loss.
Pros and cons of debit cards
Compared to credit cards, debit cards (Maestro, V Pay, Postfinance) have the advantage of affordable cash withdrawals at ATMs. In many cases, paying for large purchases outside of Switzerland using a debit card is cheaper than paying with a credit card because you pay a flat fee rather than a percentage of the transacted amount.
The disadvantage of debit cards is that they do not generally deliver the special benefits like insurance coverage, rewards or special privileges which you get with many credit cards. Credit cards are also more widely accepted. Debit cards cannot be used to pay at most online merchants – with the exception of the Postfinance card which is accepted at many Swiss online merchants.
Pros and cons of credit cards
Credit cards – and Visa and Mastercard in particular – are accepted by many merchants around the world. Additionally, many credit cards provide useful benefits such as rewards, insurance coverage and special privileges. This makes using credit cards to pay within Switzerland (where no extra fees apply) advantageous compared to using debit cards which do not provide rewards or benefits.
The high fees you pay to get cash at ATMs using credit cards are a major disadvantage. Depending on the amount you spend on a purchase, using a credit card may be cheaper (small purchases) or more expensive (large purchases) than paying by debit card.
Pros and cons of prepaid cards
Swiss prepaid cards are very similar to Swiss credit cards, and are generally issued by the same issuers. Compared to credit cards, prepaid cards have the advantages of giving you greater control of your spending and helping you avoid spending money which you do not have. This is particularly beneficial for people who have difficulty budgeting.
The disadvantage of prepaid cards is that they are often more expensive than credit cards. They also typically charge a fee when you deposit money into your prepaid account, which you do not have to pay when you use a credit card. While some prepaid cards provide identical benefits to those provided by their credit card counterparts, the majority of prepaid cards have fewer benefits than credit cards. Prepaid cards are also less widely accepted than credit cards – particularly for certain types of transactions.
Pros and cons of mobile wallets
A possible advantage of Apple Pay and Samsung Pay is that they required authentication for all payments, while contactless credit and debit cards allow unauthenticated purchases of up to 40 francs.
Mobile wallets have been a fad for many years now, but they have not achieved widespread popularity as a payment method. In order to use Apple Pay, Samsung Pay or Fitbit Pay, you need to have a credit card or prepaid card as well. When you use one of these mobile wallets, you take on yet another third-party service, opening yourself up to more possible technical glitches and data harvesting schemes. Another disadvantage is that as of yet, only a limited number of Swiss payment cards are compatible with these mobile wallets.
The card fees of the linked credit cards or prepaid cards are another disadvantage, particularly for purchases made outside of Switzerland. While Twint has the advantage of allowing a direct link to your private account (at the corresponding bank), it has not yet achieved broad acceptance in Switzerland and is not accepted at all outside of Switzerland.