Switzerland consults on cashless payment fee transparency

Swiss merchants could get a clearer breakdown of cashless payment fees under a proposed change to the Unfair Competition Act. The Swiss Federal Council has opened a consultation on the proposal, SRF reports.

The amendment would require payment service providers to show three fee components: the merchant fee, the interchange fee and the payment system operator’s licence fee. Merchants would have to receive this information both before signing a contract and throughout its term.

The proposal implements a motion by the Senate’s Committee for Economic Affairs and Taxation, which said clearer fee information would help merchants understand costs and compare offers, particularly when negotiating with payment providers.

The Federal Council says transparent total prices are generally enough to support effective competition. It intends to implement Parliament’s requirements with as little regulatory burden as possible, noting that extra disclosure obligations would create administrative work and that their benefits for competition have not been clearly established.

According to the Federal Council, cashless payments in Switzerland mainly use multi-party systems, including Visa and Mastercard debit and credit cards and Twint. The committee said a small number of payment service providers, or acquirers, have substantial market power, creating difficulties for small and medium-sized businesses.

The latest Swiss Payment Monitor, produced by the University of St. Gallen and the Zurich University of Applied Sciences, found that 71.5 percent of in-store payments were cashless. Debit or credit cards accounted for 37 percent of payments, while mobile devices accounted for 34.5 percent.