Mobile Payments

Adoption of Mobile Payment Apps Among Swiss Online Retailers Soars

In Switzerland and Austria, online retailers are embracing mobile wallets at a fast pace, with local player Twint but also Apple Pay and Google Pay witnessing strong traction, a new report by the Zurich University of Applied Sciences (ZHAW) and the Management Center Innsbruck (MCI) shows.

The report, titled Onlinehandlerbefragung 2023, draws on a survey conducted in September 2023 that polled nearly 600 online shops from Switzerland and Austria in various sectors and operating under different models to understand the state of online commerce and the different trends emerging in the space.

Findings of the survey show that mobile payments are growing in Switzerland, with Twint in particular rising to prominence. In 2023, the mobile payment app was the second most integrated payment method among Swiss online merchants behind credit cards (90%), with four out of five (79%) Swiss online shops polled indicating supporting Twint.

Payment methods Swiss and Austria online shops are supporting, Source: Onlinehandlerbefragung 2023, Zurich University of Applied Sciences (ZHAW) and Management Center Innsbruck (MCI), Oct 2023

Twint sees spectacular growth

Founded in 2016, Twint is a mobile payment method in Switzerland that allows users to connect their bank account or card through an app to make payments online and at brick-and-mortar stores. Twint claims more than 5 million users and says it carried out a total of 386 million transactions in 2022, a figure that surpasses all of the previous years since the app was launched combined and which showcases the accelerated growth it has witnessed over the past few years.

Looking more closely at historical data, the report reveals that Twint is the payment method that has risen the strongest in Switzerland. In 2018, only 24% of Swiss online shops supported the payment method but that rate quickly grew, reaching 52% in 2021 and 74% in 2022.

The rise of Twint in Switzerland demonstrates a broader trend in the country’s e-commerce sector where mobile payment apps are witnessing faster adoption than any other method method. The trend is noticeable with foreign platforms Apple Pay and Google Pay, which too have risen in popularity not just among Swiss online retailers but also Austrian merchants, growing from less than 4% in terms of acceptance rates in 2018 to now about 20%.

At the other end of the spectrum, more conventional methods including credit cards, payment by invoice, PayPal and PostFinance, the financial services unit of the Swiss Post, have recorded more moderate growth partly of widespread acceptance.

Adoption rates of payment methods among online retailers from 2018 to 2023, Source: Onlinehandlerbefragung 2023, Zurich University of Applied Sciences (ZHAW) and Management Center Innsbruck (MCI), Oct 2023

Looking at broader trends, the study found that credit cards are the most adopted payment method among online retailers in both Switzerland and Austria with a penetration rate of 90%. PayPal ranks second in Austria (83%) where the online payment method is much more popular than in Switzerland (55%).

Klarna, a major buy now, pay later (BNPL) solution provider, is another payment method that’s seeing booming traction among Austrian retailers and which is being adopted by 47% of them compared to a mere 6% for Swiss merchants.

The ten most common payment methods offered by online retailers by market, online shop size and business type, Source: Onlinehandlerbefragung 2023, Zurich University of Applied Sciences (ZHAW) and Management Center Innsbruck (MCI), Oct 2023

Payrexx emerges as top payment service provider among Swiss online retailers

The study, which also sought to uncover which payment service providers Swiss and Austrian online retailers work with to handle transactions, found that Payrexx, with 27% of the mentions, was the most popular provider among small online shops in Switzerland.

Founded in 2015 and based in Thun, Switzerland, Payrexx is an online payment platform for small businesses that allows merchants to support all major Swiss payment methods from a single source. The company claims 50,000 customers.

After Payrexx and with 23% of the mentions is PayPal, followed by Saferpay by Worldline (22%), and PostFinance E-Payment (19%).

In Austria, PayPal was found to be the most prominent payment service provider (57%), ahead of Stripe (24%) and Mollie (17%).

Payment service providers Swiss and Austrian online retailers are working with, Source: Onlinehandlerbefragung 2023, Zurich University of Applied Sciences (ZHAW) and Management Center Innsbruck (MCI), Oct 2023

Online retailers were also asked if they supported BNPL arrangements, to which 11% of respondents said they did. The figure is below that of 2022, during which 17% of online retailers offered BNPL payment options.

The online stores that provided BNPL arrangements said they worked with Klarna (BillPay) the most (29%), followed by the MF Group (24%). CembraPay, a fairly new player in the scene, took the third place with 18% of mentions.

CembraPay, a brand that came out of the merger between Byjuno and Swissbilling, was launched in April 2023 and offers a wide range of payment solutions including BNPL and embedded payment services.

Other BNPL solutions used by Swiss and Austrian online retailers include HeidiPay, Bob Pay, PayPal Plus, Ideal Payment, Twint Pay Later and Unzer (Payolution).

Adoption of buy now pay later (BNPL) arrangements among Swiss and Austrian online retailers, Source: Onlinehandlerbefragung 2023, Zurich University of Applied Sciences (ZHAW) and Management Center Innsbruck (MCI), Oct 2023

Soaring adoption of mobile payment capabilities among Swiss merchants comes at a time when payment apps are seeing increased usage among consumers. A 2022 study conducted by the Swiss National Bank found that mobile payment apps are being used increasingly often by the Swiss population, increasing its volume share to 11% of transactions in 2022, up 6% points from 2020’s 5%.

Twint currently stands as the most used mobile payment app in Switzerland, adopted by 57% of the 380+ Swiss residents surveyed by Statista earlier this year. Twint is followed by Apple Pay (39%), Google Pay (32%) and PostFinance (12%).