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Created on 21.09.2022

Card or smartphone? The pros and cons when paying

Whether in a shop or a restaurant, customers don’t want to waste any time when paying. It should be quick, but it should also be secure and convenient. Contactless payment processes tick these boxes. But which is better for your customers? Card or smartphone?

Around ten years ago, debit and credit cards paved the way for contactless payments. Today, we can also pay by smartphone. In Switzerland, the TWINT app has gained acceptance as one mobile payment option. But international competitors like Samsung Pay or Apple Pay are waiting to pounce in Switzerland.

Interestingly, although providers of contactless payment options offer their users the same thing, the payment methods themselves sometimes differ significantly. In this blog, we show you the pros and cons of different contactless and mobile payment solutions so you can better understand your customers’ needs.

Communication with the payment terminal

The most important difference is in the communication between payment method and payment terminal. With credit and debit cards and payment functions from Apple and Samsung, the data is transferred via NFC technology. NFC stands for “near field communication”. This is how it works: the card, smartphone or smartwatch is held to the payment terminal. At a distance of five to ten centimetres, the inbuilt NFC chip sends a signal that the terminal receives and reads. The payment is processed in just a few seconds. Success rate? Almost 100%.

It’s different with TWINT. QR codes that don’t rely on hardware are used because Apple has blocked the NFC interfaces for other providers. Scanning QR codes can be a problem. Why? QR codes are prone to errors caused by dirt. Scratches or light reflections on the terminal display can cause disruption to payments. Also, data processing takes at least three times as long as NFC.

A comparison of contactless and mobile payments

When making contactless payments with a card, with TWINT or with a smartphone or smartwatch via Apple or Samsung Pay, there is the same basic idea behind all these variants. It should be quick, secure and convenient – and hygienic. Compared to cash, the differences are clear. In direct comparison with one another, they are less so. These are the most important pros and cons:

Contactless payment with card

Swiss people prefer to pay by card. In 2021, every third transaction was a contactless card payment. But this love of plastic money is fading – with preference rising for mobile payments.

    • Technology: NFC technology is quick and reliable. The first-read rate is almost 100% and data transfer takes just a few seconds.
    • International: Payment by card is possible everywhere in the world. Customers and retailers alike benefit from international acceptance.

    Find out more about the advantages of the PostFinance Card in sales

    • Security: Many cardholders make payments of up to 100 francs without entering their PIN. This can lead to misuse. A thief can deduct this maximum amount several times.
    • Convenience: The card is in a wallet and this is in your pocket. Getting out your card often takes more effort than reaching for your smartphone.

Mobile payments with international payment services

In Switzerland, mobile payments are gaining in popularity. Before the pandemic, less than 3% of all transactions were paid for by smartphone. Since then, mobile payments have taken precedence over credit cards at around 17%. Amongst the international payment services, Apple Pay takes the lead. So the following pros and cons relate to Apple Pay.

    • Technology: Like debit and credit cards, smartphones have NFC chips. The same benefits as for contactless payments apply: speed and reliability.
    • Wallet: You can save flight tickets, cinema tickets and bonus programme cards in your digital wallet. If you want to make mobile payments, you need a credit card stored there. All plastic cards are digitized and are available at any time via smartphone, making the classic wallet obsolete as a storage space for cards.
    • International: Apple Pay is available worldwide. This is a big advantage over TWINT, which currently only works in Switzerland.
    • Convenience: These days, your smartphone is almost always with you wherever you are. This is also practical for making payments. In contrast to TWINT, there’s no need to open an app for data transfer with Apple Pay You just need to unlock your smartphone and hold it to the payment terminal to pay amounts up to 100 francs.
    • Security: Apple Pay is well protected thanks to Face ID, PIN or fingerprint. And from a practical point of view, if you lose your smartphone, you can use the “Find my iPhone” function to find it.
    • Compatible devices: Besides the smartphone, Apple Pay also works on smartwatches or tablets. Go for a jog, then buy some water using your watch. Apple Pay is the ideal solution for flexible usage.
    • Acceptance points: Apple Pay works when paying on location just as well as cards. The only precondition is a payment terminal with a contactless function. It’s a different matter online. Many Swiss web shops or apps have no connection to the Apple payment system. This applies for example to the Galaxus and SBB web shops. Customers frequently have to switch to a different payment method.

Mobile payments with TWINT

TWINT has established itself as a provider in Switzerland. The term “to twint” has become firmly anchored in our vocabulary and is almost synonymous with all mobile-related payment procedures. With over 3.5 million users, TWINT has a significantly higher market share than all other mobile payment solutions put together.

    • Acceptance: Because of the high number of users, TWINT is widespread at points of sale and in web shops and apps. Customers can usually rely on this payment method being accepted.
    • Multi-functionality: You can do more than just pay with TWINT. The app also enables “money exchange” between private individuals. Sending, requesting and distributing money – TWINT makes it possible.
    • QR codes: QR codes have the advantage that they can be used without terminals or electricity. For example, parking meters and farm shops often have QR codes. Scan and pay easily, even without staff.
    • Speed: QR codes are slower at data transfer than NFC technology. Also, when paying, users must first unlock their smartphone, open the app and then open the payment field. This means that a TWINT payment can take around 15 seconds longer than payment with Apple Pay or card.
    • International: TWINT should also work abroad in future. For this it needs worldwide acceptance points. So far, TWINT is restricted to Switzerland and is therefore limited. If you want to make payments while on holiday abroad, you’ll have to switch to providers like Apple Pay.

In summary

Users who want to make contactless or mobile payments have the choice between different variants. The best application depends on the particular situation. Because of the pros and cons, the trend is clearly heading towards mobile payments. Apple Pay is very quick and secure. On the other hand, TWINT is a serious contender, with many acceptance points in Switzerland and money exchange between individuals.

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