Debit cards: PostFinance opens up the EFT market in Switzerland through co-branding

19 October 2021

Debit cards: PostFinance opens up the EFT markt | treibauf

The PostFinance Card has been enjoying great popularity in Switzerland as a cashless means of payment for many years. Now, like other banks, PostFinance is gradually replacing its old card with the new PostFinance debit card.

Alongside the benefits that this debit Mastercard will offer its holders, the co-branding on this new debit card is also bringing about change in the Swiss EFT market. In this article, you will learn about the reasons behind this – and the consequences it will have for acquirers and merchants.

Content of the article

Why the PostFinance Card has played a key role in shaping the EFT market in Switzerland to date

PostFinance Cards have a very high market coverage in Switzerland: almost a third of all debit card transactions in the country are processed via a PostFinance Card, so the market volume is huge.

However, like the SBB Card and the REKA Card, the old PostFinance Cards previously only supported the EP2 communication standard, which is unique to Switzerland. This means that this huge market volume was previously reserved solely for those acquirers that supported this communication standard (primarily SIX Payment Services).

What is the EP2 standard – and why was it so important before now?

The EFT POS 2000 standard (EP2 for short) defines the processing of EFT transaction payments in cashless transactions within Switzerland.

The Technical Cooperation EP2 Association, which established the EP2 specification, forms the basis for cooperation between Swiss acquirers and the Swiss Electronic Transactions Association (VEZ).

All manufacturers of EFT terminals used in Swiss shops and catering establishments had to have their devices certified via an EP2 test prior to marketing them.

Conversely, this has meant that foreign acquirers had to adapt to this standard in order to gain a foothold in the Swiss market. However, this usually amounted to exclusion from the Swiss market because its commercial potential paled in comparison to the massive expense incurred as a result of adapting to the standard.

What will change with the new PostFinance debit card?

With the Mastercard co-branding on the new PostFinance debit card, the bank now offers the international Mastercard standard alongside the EP2 standard. This means that foreign acquirers can now also process the PostFinance debit card without any problems – and therefore benefit from the large market volume of these debit cards.

Of course, the PostFinance debit card offers a host of advantages for cardholders, too: they are now no longer limited to just using their PostFinance Card in Switzerland – it will now work abroad, too, and can also be used to make hassle-free online purchases.

You can find PostFinance’s official statement in English here.

The importance of co-branding on debit and credit cards

Co-branding on payment cards has an impact on the EFT market, since it:

  • reduces market obstacles through additional standards
  • allows more acquirers to process the card
  • gives merchants more freedom to choose the acquirer that is right for them
  • allows cardholders to use their cards in more locations (especially abroad)

What consequences does the new PostFinance debit card have for merchants?

The new co-branding on the PostFinance debit card gives merchants greater freedom to choose the acquirer that is right for them. This is because, thanks to the additional Mastercard standard, they are no longer completely dependent on acquirers that support the EP2 standard (such as SIX Payment Services).

This means that they can now compare the services and fees offered by different acquirers and choose the one that best meets their needs. By the way: We recommend that you use the Matchbox reconciliation software with its practical dashboard function to maintain an overview of all of the debit cards and credit cards you have processed, together with the fees incurred.

All that remains is the significant IT outlay that normally arises when switching acquirers due to having to integrate new terminals into your payment system. The solutions offered by Pepper will help you with this: these universal interfaces make it easy to connect over 150 different card terminals to all standard POS systems, thereby laying the foundations for quickly switching between acquirers without a hitch.

We have summarised the further consequences that the new Mastercard and Visa debit cards will have for merchants for you here.

Summary

The PostFinance Card is in widespread use across Switzerland. While the old PostFinance Cards only supported the Switzerland-specific EP2 communication standard, the new PostFinance debit cards now also support the Mastercard standard.

While the EP2 standard could previously only be processed by Swiss acquirers (primarily SIX Payment Services), the co-branding on the new PostFinance debit card now opens up the Swiss EFT market to acquirers from abroad.

For merchants, this means that they have more freedom in choosing acquirers (and therefore more room for negotiation).

Recent posts

How Matchbox helps to implement new business models quickly

16 November 2021 – Mitte 2018 entschied sich «Bühnen Bern» dafür, die eigene Buchhaltung mit Hilfe von Matchbox zu erleichtern und deutlich effizienter zu machen. Continue reading

The Nexo protocol: a new initiative to standardise cashless payments

15 September 2021 – The world of cashless payments is characterised by a range of standards, technologies and protocols – especially when it comes to cross-border transactions. The Nexo Standards consortium has taken on the task of advancing the interoperability of technologies for cashless payments. Continue reading

Multi-acquiring: why it can be worthwhile using more than one acquiring bank

9 September 2021 – In this article, you will learn what an acquiring bank does, why a multi-acquiring strategy is worthwhile for most merchants, and how you can make it easier to integrate new acquirers. Continue reading