One of Switzerland’s top retail platforms has stopped taking payments via Swiss payment app Twint following a dispute over commissions charged.
Digitec Galaxus, the online platform owned by retail giant Migros, today told clients that it will no longer accept payments made via Twint, the Swiss payment app. The reason it gave for the decision was that Twint had intended to increase the commission it charges many times over.
The commission was not publicly disclosed, but observers say that Twint want to increase the fee tenfold.
More Expensive Than a Credit Card?
Twint essentially is a debit app. Digitec Galaxus on Monday said that many credit cards asked for lower commissions than what Twint was demanding, adding that the app only served its purpose if its solution was clearly cheaper that the services of credit cards.
Twint, whose owners include SIX, the stock market operator, several big Swiss banks and, since 2018, French payment service firm Worldline, today accused Digitec Galaxus of spreading false information.
It said that it had canceled the deal it had with Digitec Galaxus because the latter refused to pay what it called were fair and standard commissions. Twint in turn was not prepared to continue granting the special conditions it had agreed to at the start of the app.
Advantage: Apple and Samsung Pay
Twint is active at 7,000 outlets and used by 2 million Swiss consumers, according to the firm. Both Migros and Coop, the dominant Swiss retailers, are partners. The conflict between Digitec Galaxus and Twint may be a sign that the success of cut-price digital services provided by banks and fintechs comes at the expense of the retail industry.
But it can’t be in the interest of the financial market if the digital payment system that includes the customer, the retailer and the bank gets upset. The banking industry is keen to use fintech-tools such as Twint to strengthen customer loyalty.
After all, what the industry fears most the spread of services provided by Apple and other similarly dominant tech firms. Apple and Samsung no doubt will take the cancelation of the deal between Digitec Galaxus and Twint as yet another reason to press ahead with its own payment solution.
