A consortium of Swiss banks hope the country's reputation for banking, technology and smartphones will give its financial institutions a commanding position for in-store and in-app payments.
Six, a bank-owned company that operates Switzerland's financial market infrastructure, including trading and payments, has thus far functioned similar to clearXchange in the U.S., focusing on person-to-person payments. Its product is called Paymit.
"Switzerland offers a very interesting market for bank-led mobile payment solutions," said Jurg Schneider, a spokesperson for Six. "Swiss people have a rather high affinity to technology and a high penetration of smartphones,"
Each bank's Paymit app will be interoperable with other banks' apps, making it possible for users to send and receive funds regardless of which bank offers the technology, Schneider said. This month, Six is launching a version of its system for retail purchases.
Paymit launched in May 2015 with UBS, Zurcher Kantonalbank and Swisscom, a national mobile network operator, among the participants. It has since added Luzerner Kantonalbank in January and this month added Banque Cantonale Vaudoise and Raiffeisen in February. It has also launched an "as a service" Web option that includes Geneva, Obwalden, St. Gallen and Zug banks, along with the other participants. The "as a service" option is open to all banks.
As it prepares to dive deeper into mobile commerce, Paymit is already Switzerland's most popular payment app, with 170,000 downloads in its first year and coverage of most of the country's banking market.
P2P payments are considered a gateway to other financial services, even for companies that specialize in the model. PayPal has branched into social payments, credit and in-store payments; while clearXchange has long worked to expand its use cases to include functions such as government disbursements.
In the case of Paymit, it will add point of sale, in-app payments and e-commerce, with the first retailers deploying the service by the end of February. Online purchases will be added in the second quarter. The app is designed for interoperability, using QR codes to ensure it can be accepted by as many retailers as possible for its initial rollout. It is additionally incorporating a design that demonstrates it's a ubiquitous bank-led service.
"The Paymit app is branded with the new Paymit logo," Schneider said. "Thus the various Paymit apps offered by the banks have the same look and feel."
Paymit is responding to some of the market conditions that also exist elsewhere—the decline of mobile network operator-led mobile payments initiatives and a more direct bank approach to mobile payments. Swisscom offered a mobile payment service called Tap-it that the mobile operator ditched in 2015 to join Paymit, following uptake for Tap-it that was well below expectations. The mobile networks' Weve initiative in the U.K. and Softcard wallet in the U.S. met similar fates.
Combined with frustration over Apple's ability to lure merchants to Apple Pay, these other products' failings provide an opening for banks. But the challenge will be gaining merchant acceptance, according to Zil Bareisis, a senior analyst at Celent.
"P2P use cases can potentially be extended to merchants, especially small ones, but implementing them at scale would likely require merchant integration," Bareisis said.
Beyond QR codes, other contactless payment technology can be introduced, Schneider said, without commenting further. Six also has a payment services division with a network of Near Field Communication-enabled point of sale terminals, which can support Apple Pay and other NFC options in addition to Paymit.
"The [NFC terminals] in Switzerland are continuously growing," Schneider said.