Launched in response to the impact of the Coronavirus on online shopping, debit cards were quickly criticized for the rates applied to merchants offering this payment solution to their customers. An agreement with the suppliers was recently reached.
Let's take a step back.
One fine day, we realize that a virus called Covid-19 will have a lasting impact on our lives. This was followed by the beginning of a pandemic that led to social distancing measures and lockdowns.
Telecommuting is becoming recommended or even mandatory. We meet at home and our purchasing acts are rapidly evolving towards online purchases.
The only problem for those who don't have a credit card is that it's impossible to make these purchases. At the same time, this has a negative impact on merchants' turnover, both in physical points of sale and on online sales platforms.
The reaction of credit card players?
Visa and Mastercard react and identify a business opportunity by launching new debit cards.
The difference between the various cards is explained by Worldline:
Debit cardsDebit cards are characterized by the immediate withdrawal of the amount from the bank account (pay now).
Credit cardsThe essential feature of a credit card is that the amount is withdrawn from the bank account at a later date. The amount of the purchase is not debited directly from the bank account, it is the bank that pays first. The total amount of all payments made with the credit card is debited monthly (pay later). Credit cards often include travel insurance.
Prepaid cardsA prepaid card is reloaded with a sum of money before it is used and is then used for payment until the amount is used up. The process can of course be repeated as often as you like.
Promises.
Increased security for merchants and users. An internationally accepted payment method. A solution for online and on-site purchases. Finally, the fact that you can link these cards to apps such as Google Pay, Samsung Pay or Apple Pay.
Are there also advantages for the retailer?
Yes, but...
Offering an additional payment method offers an undeniable advantage. But at what cost?
When the cards were launched, 10 cents were deducted as well as a rate of the purchase amount. 0.49% for Mastercard and 0.96% for Visa. It doesn't sound like much, but the fees could quickly add up depending on the total spent.
Are they all in the same boat?
Not really. Major retailers such as Coop and Migros are in a position to negotiate the applicable rates.
Of course, this is not the case for small retailers with only one point of sale. However, it is the latter that has the least leeway when it comes to its cash flow.
The crank return.
It didn't take long for voices to be raised. First, the small traders and then the politicians. National Councillor Jacqueline de Quattro was the one who called on the Federal Council to consider that the communication of debit card issuers was out of step with reality. In particular, the fact of having misinformed users was criticized.
The Federal Council is getting involved.
The Federal Council therefore decided to request the intervention of the Price Supervisory Office. As a veritable institution in this field, previous actions have made it possible to save the Swiss hundreds of millions of francs.
Mr. Price negotiates.
Thanks to negotiations with the main players, an amicable agreement was reached in order to reduce the rates concerned and thus reduce the cost for the merchant, or even for the customer, the latter not being the victim of a proportional price increase.
Purchases and projects.
As a key player in the credit sector, the Milenia financing platform is committed to providing information on all subjects that may impact your purchasing power. Credit cards, debit cards, loans, personal loans, banking terms... Everything you need to know to make the best decisions so that your purchases and projects are carried out within your means and budget.
Its team of advisors will also be able to guide you through the process of applying for credit. We invite you to visit our platform so that you can simulate your amount, the duration and the best applicable rate.
Confidently, simply and quickly.
Speaking of credit cards.
A credit card offered at advantageous conditions?
This is possible thanks to the partnership between Milenia and Bonus Card. The advantages offered are numerous: discounts with the biggest brands in Switzerland, a bonus program redeemable in shops, promotional offers, discounts of up to 25% for your nights in a hotel or when renting a vehicle... In addition, there is legal protection, travel insurance, cancellation of reservations, emergency services, goods delivery insurance, etc.
Isn't that enough? Thanks to the agreement with Milenia, you get a free credit of CHF 40 and you don't pay anything for your first year of contributions.
Convinced? Contact us to take advantage of this offer. Not a Milenia customer yet? Don't worry, it's a gift all the same!
Shall we try?