Swiss perspectives in 10 languages

Credit card pricing set to change

Customers may opt in future to pay in cash rather than use credit cards Keystone Archive

Switzerland's competition watchdog has approved a deal between the issuers of Visa and Mastercard credit cards and banks aimed at cutting costs.

The accord limits fees levied by the card companies on their partner banks and allows stores to offer different prices depending on whether a customer pays in cash or with a card.

“This decision will affect all means of payment,” said Walter Stoffel, president of the Swiss Competition Commission.

The Credit Suisse, UBS and Corner banks, as well as card representatives Telekurs Multiplay and Viseca Card Services, signed the agreement, which is limited to an initial four-year period.

The credit card business in Switzerland is flourishing. There are 3.4 million cards in the country, which are used in transactions worth SFr15 billion ($11.7 billion) each year.

Visa and Mastercard dominate the market, but American Express and Diners Club are also present, though their share of business is less than five per cent.

The agreement covers two points, lowering interchange fees charged by card issuers and eliminating the so-called non-discrimination clause.

The end of this clause means that store managers will be able to offer lower prices to consumers who would rather pay in cash than with a credit card.

Previously, there were no discounts for customers who chose not to use a card.

The Competition Commission had ruled in 2002 that this clause violated Switzerland’s cartel law. However, this decision was overturned after an appeal by card issuers. A ruling from the Federal Court is pending.


The other point means that domestic interchange fees will drop. This levy usually represents part of the difference between what a customer pays and what a merchant actually gets when cards are involved.

The competition watchdog has warned in the past that while such fees are justified, they should only cover the cost of the card network.

The accord calls for a drop in the average price of these fees of around 25 per cent. Companies issuing cards have agreed to cut the levy by 15 per cent when the agreement comes into force, early next year.

Domestic interchange fees, which represent up to 1.75 per cent of the cost of an item on sale, should eventually fall to 1.3 per cent.

“This should bring us below the European average,” said Stoffel.

Interchange fees in Switzerland were worth SFr160 million to credit card companies out of SFr840 million total revenue.

Merchants will also be informed of interchange-fee rates in their sector. Previously, this information was confidential.

swissinfo with agencies

There are an estimated 3.4 million credit cards in Switzerland, issued by Visa, Mastercard, American Express and Diners Club.

Around 360,000 retailers and merchants accept credit cards.

In 2004, 82 million transactions worth SFr15 billion were recorded.

Domestic interchange fees were worth SFr840 million in 2003.

In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at

SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR