Accepting Postfinance in Switzerland

PostFinance is one of Switzerland’s largest retail financial institutions and its card and e-payment products are widely held by Swiss consumers. For a merchant selling into Switzerland it belongs in the checkout alongside TWINT and cards, and like everything Swiss it needs to be priced on Swiss terms.

Domestic

How to accept PostFinance as a merchant

Acceptance runs through PostFinance itself or through a PSP connected to it. The customer authorises in their own banking environment or with their PostFinance card, and the payment confirms without a card scheme in the chain for the domestic products, which is why the cost profile differs from international card acceptance.

Switzerland is outside the EU and the EEA

This is the point that catches merchants extending a European setup northwards. EU interchange caps do not apply in Switzerland, the Instant Payments Regulation does not apply, and the European Commission’s binding commitments requiring Apple to open iPhone NFC access to third-party wallets cover the European Economic Area, which Switzerland is not part of. A Swiss rate inherited from a European agreement is inherited from a different regulatory regime.

Pricing

Why that usually means overpaying

Because card acceptance in Switzerland is not constrained by EU interchange caps, it is frequently more expensive than in neighbouring markets, and the gap between card and domestic account-based payment is correspondingly wider. If your Swiss volume was priced as an extension of a European contract rather than negotiated on Swiss numbers, the difference is likely to be material. Isolating Swiss volume and looking at its effective rate on its own is the only way to know.

Outside

Three more things that follow from being outside the EEA

The regulatory point above has consequences beyond interchange, and they are the ones that get missed because none of them sits on the acceptance rate.

Classification. A Swiss card presented to a European acquirer is a cross-border transaction with the assessments that go with it, where the same card presented to a Swiss acquirer is domestic. If your Swiss volume runs through a European contract you are paying a cross-border classification on domestic Swiss business, and that sits underneath the acceptance rate rather than inside it. Currency. Swiss volume is priced and settled in Swiss francs, so if your contract settles you in euros there is a conversion between the two with a margin attached, and it is a separate negotiation from the acceptance rate that in most cases nobody has had. Ask what reference the conversion is struck against and what margin sits on top of it.

Reporting. None of the above is visible while Swiss volume is reported inside a European total. So the first thing to ask for is not a rate, it is a view: one month of Swiss volume shown separately, with acceptance, cross-border component and conversion margin as three figures rather than one.

Which payment provider supports PostFinance in Switzerland?

Datatrans, Saferpay, Worldline and Unzer all document PostFinance, and PostFinance also contracts directly. The useful questions are what a PostFinance transaction costs against your effective Swiss card rate, whether the domestic methods are reported separately, and whether anyone has ever negotiated your Swiss pricing as Swiss pricing.

Two levers

Isolate the Swiss line, then pull two levers

The section above says isolating Swiss volume is the only way to know. Once it is isolated there are exactly two levers, and both are worth arithmetic.

The first is mix. Take 1.5 million euros of Swiss revenue at 70 per cent cards and 30 per cent domestic account-based methods. At an illustrative 1.9 per cent on Swiss cards and 0.8 per cent on domestic methods, that costs 19,950 plus 3,600, so 23,550 euros. Move twenty points of the mix from cards to domestic methods and 300,000 euros reprices from 1.9 to 0.8 per cent, which is 3,300 euros a year for a change in what the checkout shows first and how clearly.

The second is the rate itself. A Swiss rate inherited from a European agreement was set against European interchange, which does not apply here, so it was never priced against the market it is being used in. What a Swiss-negotiated rate looks like depends on your volume and your mix, and no public source will tell you, which is exactly why the isolated line has to come first. Both levers are modest on a small Swiss book and neither is available at all while the volume is invisible. The order is: isolate, then mix, then rate.

Reviewing what this costs you

What you pay is set in your agreement, not by the scheme. Start by establishing whether you are overpaying your PSP, or move straight to cutting your PSP costs, because a cheap method priced badly still costs more than it should.

Relevant markets: Switzerland