Growth in Issuing, Acquiring with defensive qualities

The Payment division performed well again in 2015. Issuing increased the number of issued cards to around 1.4 million, which is particularly down to the close collaboration with the partner banks. Acquiring maintained its prior-year level and gained important new customers.

Issuing as a centre of competence for partner banks

Viseca is one of the largest Issuers of credit and PrePaid cards of MasterCard and Visa in Switzerland. Viseca’s private and corporate customers benefit from a broad range of products and services. The key focus of Issuing in the past financial year lay on pushing ahead with digital payment projects. Detailed information can be found in the “Strategic projects” section.

Viseca further improved the card penetration rate in 2015 and increased the number of issued cards to around 1.4 million by the end of the year. This was facilitated by the major commitment of the Viseca client advisors: They held around 200 training courses for 3,000 participants from partner banks in 2015 in order to familiarise bank staff with the products of Viseca. This has also enabled Viseca to underline its status as a centre of competence for partner banks in the cards business.

Together with the partner banks, Viseca has developed a new service for their personal finance management range of products (PFM). Bank customers can import their credit card transactions into their PFM solution via an interface with Viseca, and they can list their credit card transactions, browse  all transactions together in their e-banking, add comments and create clear diagrams to visualise them. Zurich Cantonal Bank is the first bank to benefit from the new interface and collaboration. The development took place in close cooperation with the Swiss fintech start-up Contovista.

Acquiring upholds sales despite challenging environment

As Acquirer, Aduno makes sure that the customers of its affiliated partners can pay conveniently and securely with all commonly issued credit and debit cards. To this end, it takes care of the acceptance and processing of electronic payments at all points of sale, whether online or physically at the point of sale. It provides both the physical payment terminals and the interface to the payment service provider (PSP) in the online shop.

The Acquiring segment upheld its sales in the 2015 financial year, which in view of the scrapping of the euro floor can be regarded as a success. New key accounts from retail, electronics, food and beverages and transport generated additional turnover and offset the downturn in sectors sensitive to the exchange rate such as tourism, the hotel industry and the crossborder retail trade.

Subsidiary Vibbek AG, which specialises in software for payment terminals, successfully launched the rollout of its cloud-based software in 2015. The cloud solution means that all control functions are stored centrally and the individual payment terminals only need a secure connection to the cloud. This makes things much easier, particularly for large merchants with several branches. They can simplify labour and cost-intensive processes and also have an overview at all times of all turnover generated. Several European customers have already been convinced of these benefits.

The new Yomani Touch payment terminal was launched in the Swiss market in the fourth quarter of 2015. Yomani Touch is a state-of-the-art payment terminal which has won a renowned design price.

Impact of the lower interchange fee

The lower domestic interchange fee of 0.7 per cent prescribed by the Competition Commission has applied in the credit card business since the start of August 2015. This will be followed on 1 August 2017 by a second reduction to 0.44 per cent. The interchange fee is charged to the Acquirer by the Issuer when customers pay by credit card. The Acquirer in turn charges the interchange fee to the merchant as part of its commission.

For the Aduno Group, the reduction of the interchange fee has two different consequences: on the one hand it exerts a negative impact on earnings as within the Group the volume of credit card business is significantly larger in the Issuing business than in Acquiring. On the other hand, merchants benefit from lower fees, thereby making credit cards an even more attractive means of payment for them.