Twint is growing and growing - also at Digitec and Galaxus

Almost ten years after its launch, Twint's payment service is so successful that there is even a verb in the language, at least in Switzerland: twinten. It refers to the transfer of mostly small amounts of money via smartphone app. 590 million times were twinned in 2023. In purely mathematical terms, that's around 65 times per person in Switzerland - including babies and the elderly.

In the announcement on the 2023 financial year, Twint also announced that the number of customers had risen to over five million.

The company Twint AG

Twint was originally a subsidiary of Postfinance. It was founded in 2014 and went live in 2015. It merged with its competitor Paymit in 2017. Twint AG today unites seven shareholder groups: Banque Cantonale Vaudoise, Credit Suisse, Postfinance, Raiffeisen, UBS, Zürcher Kantonalbank and the payment processors SIX and Worldline. The company does not disclose any turnover or profit figures.

Twint is thus continuing its growth at a high level. The number of transactions had already increased significantly, especially during the coronavirus pandemic. When paying with Twint, "social distancing", i.e. avoiding direct contact with other people, was easy to practise.

In the meantime, Twint has further expanded the app. It is set to become a kind of Swiss army knife for mobile payments. It is already possible to use the Twint app to donate money, buy a parking ticket or manage vouchers or discount coupons. The introduction of home page widgets is planned for this year: This should provide a further boost. This will eliminate the need to search for and open the Twint app and unlock it before paying.

According to Twint, 72 per cent of the 590 million transactions in 2023 will be for retail, while 28 per cent will be between friends or family. At 84 per cent, growth is highest in stationary retail. The high proportion of shops that offer Twint as a payment option is also likely to be a key factor in its success. In bricks-and-mortar retail, the proportion is 77 per cent, while 76 per cent of all online shops offer customers the option of paying by Twint. The almost golden law of the Internet age is proving true: a strong supplier often prevails here. And the bigger it already is, the faster it continues to grow - the famous network effect. A service that many people are already using becomes attractive to those who are not yet doing so.

Twint is hesitant about NFC

The basic principle of Twint is to scan a QR code and then make the payment from there. However, it would be much faster with NFC (Near Field Communication). Anyone who uses Apple Pay will be familiar with this: pull out your iPhone, press the side buttons twice and the stored credit card is charged at the NFC point.

So far, Apple has not offered the NFC interface to third parties. For security reasons, as they say. Or, as no one is officially saying, to protect Apple Pay from unwelcome competition. But there could be movement on the matter. Because there is pressure from the EU. Its competition watchdogs are threatening to impose heavy penalties for foreclosure. Apple is therefore likely to consider opening up access to its NFC chips after all.
That would be good news for Twint. This could eliminate the diversions via QR codes or Bluetooth. However, Twint has not made a clear statement that it will offer NFC payments in the iOS app as soon as this is technically possible. A Twint spokesperson is quoted by Watson.ch as saying that they will look into this when the time comes. Otherwise, it is pointed out that the new widgets also enable payments "in a matter of seconds".
This attitude is also evident with Android. Unlike Apple, Google is not restrictive here. Nevertheless, there is no NFC function in the Twint app for Android users.

Expensive service for shops

As successful as Twint is with customers, the fees that Twint charges are a problem for the shops that offer Twint as a payment method. For example, Sunrise recently announced that it would charge customers a surcharge when paying an invoice with Twint or Paypal. Sunrise also charges a surcharge for payment by credit card. Only electronic bank transfers work without an extra fee.

Digitec Galaxus also has a history with Twint. In 2020, we were unable to reach an agreement with Twint on the amount of the fees. As a result, the payment option was not even offered in the shops for months. Negotiations were only finalised after a few months. This is also reflected in the dip in the development of Twint in the development of payment methods in the shop.

The fact that many customers now pay with Twint is a two-sided coin for merchants. On the one hand, many people no longer have cash in their pockets. If you don't offer cashless payment, you lose them as customers. It is also very easy for merchants to accept Twint. In principle, all they have to do is generate a QR code that customers scan. On the other hand, the fee per payment for merchants is sometimes higher with Twint compared to debit cards or Maestro. Twint charges 1.3 per cent of the invoice amount. The fees for credit cards are in a similar range to Twint, or even higher depending on the supplier.

As a customer, you will not usually notice this. When paying in our shops, for example, we don't pass on the different fees. The farm shop or the football club's barbecue stall don't usually charge a surcharge either. Twint is particularly attractive for these small suppliers with rather few transactions and low turnover.

For Digitec Galaxus, as a somewhat larger company with a corresponding turnover, it would be best financially if customers paid their bills by bank transfer or with the Cumulus credit card. Because we are part of the Migros Group, there are no or very low fees. Which, of course, you as a customer couldn't care less about. But sometimes you can make a wish.

Note (26 January): I have clarified or corrected in this article that the transaction fees for credit cards are usually slightly higher than Twint's fees, but lower for debit cards.