Switzerland

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Payments

Domestic and Preferred Card Schemes

95% of customers have made online payments in Switzerland using Payment Against invoice, with 65% making payments using credit cards. Paypal, eFinance, Cash on Collection and bank transfer methods like SOFORT are all popular alternate payment types online.[1]

Alternative Payment Methods

According to information from Netcomm Suisse, consumers in Switzerland prefer paying with PayPal (43 percent), credit card (40 percent) and cash on delivery (39 percent).[2]

Other Payment Methods

Other popular payment methods in Switzerland are online bank transfer, prepaid or rechargeable credit card, post-office issues cheque, Sofort/direct bank transfer, payment in-store after reserving online and bank transfer in branch.[3]

Digital Invoicing

The majority of Swiss consumers, almost nine in ten, prefer to pay by invoice. Nearly 10% of all orders are done with mobile devices.

The study also shows that 85% of orders were being placed via internet (of which 10% took place by mobile devices), the remaining 15% comes from telephone and post orders. Swiss consumers like to pay by invoice (88%), while payment by credit card is being favored by only 7% of the respondents. [4]

Customer Experience

Ultimately, providing an exceptional customer experience will encourage Swiss shoppers to place orders with your business. An ‘appropriate payment process’ is valued by 91% of shoppers, while shop certification is seen as a trustworthy necessity for 82% of respondents.[5]

Payments Regulation

From the perspective of banking regulation, electronic and mobile payment systems based on traditional credit and debit card schemes basically present the same issues as the card schemes they are based on. This means that the client money accounts of any processing agents or other service providers that are involved in the flow of funds must be structured as settlement accounts in the meaning of art. 5 para. 3 lit. c BankO in order to avoid a quali cation as deposit-taking from the public and a potential banking license requirement for such service providers (to the extent they are not already licensed as banks). Other options are a default guarantee for such accounts granted by a Swiss bank or structuring the service provider’s activity as purely cross-border from abroad into Switzerland. The proposed new FinTech regulation will offer more ex- ibility, e.g., by extending the maximum holding period for funds in settlement accounts to 60 days, as further discussed in section II.6 above. Where payment solutions can be linked to traditional bank accounts, these have to be maintained by regulat- ed banks that are authorized to hold deposits.[6]

Local entities

Amongst the largest payment methods in the country, the most trusted local payment method, PostFinance, has become a payment mainstay in Swiss e-commerce sites, with 11,000 merchants offering PostFinance at checkout. HiPay is pleased to announce our recent integration of PostFinance as a payment method in our Enterprise platform. Created by the national mail service in Switzerland PostFinance can be used by all PostFinance card holders as well as all clients with a PostFinance E-finance account. With the integration of PostFinance in our Enterprise service, our merchants now have access to 4.6 million potential new customers.[7]

Mobile payments

86% of online shoppers used a desktop/laptop to make their most recent purchase, with 7% using a tablet and just 5% using a smartphone.[8]

Logistics

All imported goods must be presented to the appropriate Customs office and declared for clearance. Goods imported into Switzerland must be declared within the following time limits from arrival in the country by various means of transportation: road, 24 hours; river, 48 hours; rail, 7 days; and air, 7 days. The importer may examine goods before submitting them for clearance. For Swiss Customs purposes, an ordinary commercial invoice in duplicate or triplicate is considered sufficient documentation. The invoice should contain the following details: description of the products and packaging, gross and net weight of each package, quantity (in metric terms), country of origin, and CIF value to the Swiss border. As Swiss duties are specific, indication of value is required only for statistical purposes. No consular or other stamp is required.

For practical purposes, almost all commercial shipments are handled by forwarding companies, which, in most cases, also are legally empowered to act as Customs agents. They handle the Customs clearance, including the VAT and any applicable duties. The Customs agent pays the VAT, duties and other fees on behalf of the importer and then invoices the total cost as well as a service fee to the importer. Shipments sent by courier are handled in the same manner.

Swiss importers are able to counsel suppliers with information on Swiss requirements to facilitate documentation on the Swiss side. A certificate of origin is not normally required unless preferential duty rates are requested; however, one may be required for health reasons (meats and plants) or for reasons of quality control as with appellation wine.[9]

Infrastructure

Some of the largest international trading and transit companies are based in Switzerland. They operate a network of bonded warehouses and other relevant facilities offering any kind of services needed in international trade.

Suppliers of consumer goods may deal with an importer/wholesaler, engage the services of a representative, or sell directly to buying offices of large retail chains, especially if dealing with mass-produced goods. Often a representative or agent, who usually specializes in one or more product groups, is responsible for distribution in the whole country.[10]

Import Duties

Swiss duties are generally "specific" rather than "ad valorem”. Duty varies according to the item imported, and the Swiss customs tariff uses the Harmonized System (HS) for the classification of goods. Customs duties are levied per 100 kilograms of gross weight, unless some other method of calculation is specified in the tariff (e.g. per unit, per meter, per liter). The gross dutiable weight includes the actual weight of the goods and their packaging, including the weight of any fixing material and supports on which the goods are placed. Although Switzerland has one of the highest applied average MFN tariff rates for agricultural products (almost 30%), its tariff rates for non-agricultural or manufactured exports are quite low, in fact one of the lowest (at roughly 2% or half the average U.S. rates). Hence, with some exceptions, import tariffs for U.S. exporters of manufactured goods to Switzerland tend to be negligible.

Imported goods and services are also subject to a Swiss value added tax (VAT). The standard VAT rate is 8.0%, although there is a reduced rate of 2.4% for certain goods and services, including the following: foodstuffs; agricultural products (meats, cereals, plants, seed and flowers); medicine and drugs; newspapers; magazines; books and other printed materials; and radio and TV services. Domestically produced goods are subject to the same VAT rates.[11]

Marketing

Marketing spend in Switzerland has grown steadily since 2010, current spend is 4.5 billion USD. Television leads the charge accounting for 1.5 billion USD of the market spend. Newspapers account for the second largest market spend at 1.2 billion USD. Digital spend has grown consistently over the last four years, reaching 166 million USD in 2015.[12]

Shoppers

Switzerland's population exists of 8.1 million people, of which 87% uses the internet. 4.4 million of these internet users shop online. These online shoppers or e-shoppers on average spend €2,858 per year. Of the Swiss population, 43% uses social media. The Swiss E-commerce sales reached €12.7bn in 2014, which means there has been a 16.1% e-commerce growth in 2014. The VAT-rate in Switzerland is 8%. [13]

Older people are a particularly active category when it comes to online shopping. 82% of Swiss people aged more than 65 shop online.[14]

Social Media

45%of the population is already on social media. 12% of Swiss eshoppers have already ordered from a social network.[15]

Major shopping categories

Total ecommerce revenue across all product categories is 9.3 billion USD, expected to reach 12.8 billion USD by 2020. Fashion is currently the leading product category, accounting for 3.1 billion USD market share. Electronics is the second product category, generating 2.6 billion USD.

By 2020, Fashion is to remain the leading product category. Valued at 4.6 billion USD, ahead of electronics which will almost reach 3 billion USD in 2020.[16]

Major retail holidays

It’s noted that an online Swiss shopper spends an annual average of 1,600 euro. The most popular product categories are clothes, thansport, books, tickets/reservations and holiday.[17]

Legal / Regulatory

With the exception of Switzerland’s deeply inadequate internet piracy laws (outlined in the United States Trade Representative’s annual “Special 301 Report”), the Swiss legal framework ensures appropriate protection of intellectual property and its enforcement.[18]

FX Policies

Switzerland has seemingly always had an outsized significance to the global financial community, and its currency is no exception. The Swiss franc is the sixth-most traded currency on the foreign exchange markets, even though its economy (in nominal GDP) ranks just 19th in the world. Despite a long-held reputation for conservatism and prudence, the Swiss franc is not a common reserve currency. The central bank behind the Swiss franc is the Swiss National Bank. As befits the country's reputation for sober and conservative economic management, the SNB does target a consistent inflation rate of around 2%. Generally speaking, the SNB does not engage in stimulative monetary policy in response to economic downturns.[19]

Technology

Switzerland’s population exists of 8.1 million people, of which 92% uses the internet. 4.7 million of these internet users shop online.[20]

Switzerland has quite a high Internet penetration. With 86,7% it’s above the average European Internet penetration rate of 76,5%. Data from Eurostat shows that there are 6,1 million people in Switzerland who are between 16-74 years old, of which 5,2 million are regular internet users and 4,4 million are online shoppers.[21]

Security

TBD

Mobile appetite

More males than females use smartphones and tablets for online services in Switzerland: 69% versus 61%. Another study suggests that 55% of the Swiss surveyed is a smartphone user of which 9% uses this device weekly for online shopping.[22]

References

  1. eShopWorld "Switzerland eCommerce Insights"
  2. eCommerce News EU "eCommerce in Switzerland"
  3. eCommerce News EU "eCommerce in Switzerland"
  4. ECommerce News. "ECommerce in Switzerland Grows."
  5. Asendia "The Swiss eCommerce Trends Your Business Needs to Know"
  6. Lexology "Regulation of Electronic Service Provider in Switzerland"
  7. HiPay "Another Record Breaking Year in Swiss eCommerce"
  8. eShopWorld "Switzerland eCommerce Insights"
  9. Export.gov "Switzerland Country Guide"
  10. Export.gov "Switzerland Country Guide"
  11. Export.gov "Switzerland Country Guide"
  12. eShopWorld "Switzerland eCommerce Insights"
  13. ECommerce Europe. "Switzerland."
  14. Lengow "Ecommerce Swiss Country Guide"
  15. Lengow "Ecommerce Swiss Country Guide"
  16. eShopWorld "Switzerland eCommerce Insights"
  17. eCommerce News EU "eCommerce in Switzerland"
  18. Export.gov "Switzerland Country Guide"
  19. Investopedia "The Swiss Franc: What Every Forex Trader Needs to Know"
  20. eCommerce Europe "Switzerland eCommerce Europe"
  21. eCommerce News EU "eCommerce in Switzerland"
  22. eCommerce News EU "eCommerce in Switzerland"