Switzerland's much-vaunted payment app Twint has barely rippled with consumers so far. What began as a well-intentioned collective push is struggling with lack of customer demand. 

I'm never using Twint again. Why? The payment app blew it the first time I wanted to buy lunch at my local supermarket.

After several unsuccessful attempts with the Twint beacon, with restless bankers tapping their feet impatiently behind me in line, I gave up and held by old-school debit card to the terminal instead – contactless, mobile, but most importantly in the rush, fast and unfussy.

Twint fell into my ever-growing scrap heap of digital services. If they don't work the first time, I'll write them off. I don't seem to be unique in this regard – in fact, most Twint users seem to have adopted a similar pattern. You only get one chance to make a first impression, in the digital space just like in the real world.

Hurdles and Obstacles

The payment app's goal? One million users by year-end. The to-date download and user stats are disappointing – despite the combined marketing and advertising heft of Swiss banking including UBS, Credit Suisse, Zuercher Kantonalbank, Postfinance and cooperative Raiffeisen.

My lunchtime experiment presents a raft of hurdles and obstacles that Twint must clear, aside from the obvious one: enticing slow-to-adapt Swiss clientele to adapt to the digital world. Initial signs? Doubtful that Twint will manage it.

1st Problem: No Real Demand

The most salient proof: Twint promises a free 10,000 Swiss franc holiday for downloading the app. The sweetener is absurd: a promising digital app which will truly add value doesn't need to dangle gimmicks to attract clients.

The Twint technology is very mature and modern, but two-thirds of Swiss clientele still prefer paying in cash. To be sure, shopping online with Twint via a QR code is quick and seamless, but this method is one of many efficient ones like credit cards or Paypal.

The app is useful for peer-to-peer payments, where apps such as Venmo have seen monstrous growth in the U.S. in recent years. This type of payment remains a niche one, popular with millennials.

2nd Problem: Twint Isn't Miles Ahead on Usability

Twint's main case is, simply pay with your smartphone. This argument only goes so far with users: what difference does it make if I hold my smartphone up to the beacon or my credit card to the terminal, perhaps with the added security level of a pin code?

Another built-in hurdle for Twint is that users must enable their smartphone's bluetooth or scan a QR code. This translates to more work for merchants, who will be required to undergo a complicated installment process to have an additional beacon beside the standard debit card terminal. 

3rd Problem: Twint's Rivals Hold Trump Cards

Twint is a cooperation between Swiss banks, Swisscom, SIX and the large domestic retailers. Still, contactless payments already are well established in Switzerland thanks to credit and EC cards.

To replace those commonly used methods, Twint would have to offer some decisive advantages. It is questionable whether having one card only instead of a multitude in your wallet will suffice.

It will be even more difficult to win against giant rivals Apple Pay and Samsung Pay. With the NFC technology, the two smartphone companies have a decisive advantage. Users don't need to download an app or to open a specific functionality when they are paying for something in a shop.

UBS and Viseca, the large credit card issuers, don't want to work with Apple Pay because they support Twint. But the financial-services companies in the end are fighting users. They decide which technology will stay. And it doesn't look as if Twint will be the one.

4th Problem: Twint Only Works With a Large User Group

Twint seems to have few advantages compared with existing digital payment systems. The providers know this. Therefore, they aim to add further services to the app to offer an added value – including loyalty programs and customer cards.

In doing so, Twint wants to make use of two decisive factors in the digital economy: the network effect and the lock-in effect. The former stipulates that a digital solution is able to make better use of its assets the more clients it has. With Twint this means the more retailers that use the system the better it will be able to perform as a shopping and payment app. This of course also means that Twint needs a massive increase of the number of users – loyalty programs otherwise won't be of much use.

Once the network effect kicks in, the lock-in effect follows suit: users who opted for the app as their standard means of payment will be unlikely to switch again. To reach the critical mass of users, Twint will be in for a long and costly rivalry.

5th Problem: Twint Is an Island

The idea behind Twint is laudable: the Swiss financial market wanted to provide its own Swiss mobile payment solution in a bid not to loose the all-important interface to powerful foreign rivals such as Apple, Samsung, Google and Microsoft.

The Swiss providers knew what they were up against, because there is a law for digital solutions: «The winner takes it all.»

But the Swiss have forgotten about a further, even more important law: the digital world doesn't have country borders. Digital applications and solutions are part of a network economy whose use is getting stronger the more it expands.

If Swiss banks want a Swiss solution with Twint, they mainly are concerned about the protection of their own market strength in respect to transactions. The user by contrast couldn't care less about the protection of the banks' market. They want a payment solution that doesn't only work in Switzerland but is universally applicable and compatible, such as cards and Apple Pay.