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Banks threatened with withdrawal fee caps

Cash machine withdrawal fees could be capped by the government under a plan being hatched to stop banks stalling on an industry-wide agreement to slash soaring fees, a media report said Thursday.

Banks threatened with withdrawal fee caps
Photo: DPA

Citing political sources, business daily Handelsblatt reported that the government was considering drafting a law to set maximum fees because it was growing tired of banks’ dithering over setting standard fees themselves. The opposition would support such an approach, the paper said.

The country’s savings banks, credit unions and private banks are supposed to present an agreement to reduce exorbitant cash machine fees by August 31, but appear unlikely to come up with a solution on their own.

The watchdog has for months been reviewing cash machine withdrawal fees, which average €5.64 but sometimes reach up to €10 in Germany, even though experts estimate each transaction costs the bank only €0.63. These fees are high compared with other countries, particularly for customers using an ATM belonging to another bank with whom their own bank does not have a partnership.

In July the Federal Cartel Office formally rejected a €5 fee limit by the leading banking association, the ZKA, telling them the amount was still too high.

The threat to legislate represents a forceful shot across the banking industry’s bow. Sources told Handelsblatt that federal Consumer Minister Ilse Aigner’s patience with the banks had all but run out.

The opposition Social Democrats are also in favour of an ultimatum to the banks.

“Fees on withdrawals from other banks’ ATMs of €5 to €10 are not acceptable for customers,” Carsten Sieling, the deputy parliamentary leader for the left wing of the party, told Handelsblatt.

Fees needed to be standardized and lowered, “whether by self-regulation or, if necessary, by law,” Sieling added.

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Cashless payments in Switzerland: What is Twint and how does it work?

If you live in Switzerland, you are likely no stranger to Twint and maybe even use it regularly to make and receive payments. But if you are not familiar with this app, this is what you should know.

Twint app can be installed on a mobile phone.
“Twinting” money with a smartphone is easy and convenient. Photo by Andrea Piacquadio from Pexels

In Switzerland, the word “Twint” is used both as a noun and a verb.

As a noun, it describes the mobile application which allows you to pay for various goods and services practically everywhere in the country.

As a verb, (“to twint”), it means to send someone money, or receive it, via the same app.

So what exactly is Twint?

Simply put, it is digital cash (not to be confused with bitcoin, which is digital currency) that was first introduced in Switzerland in 2014 and has become very popular since then.

Twint logo. Image by Twint.ch

People like it because it is an easy and quick way to make instantaneous payments, especially in situations when credit cards or physical cash can’t be used.

A big part of its convenience is that it can be used at cash registers, vending machines and parking meters, as well as in online shops — pretty much everywhere in Switzerland, even in places that don’t accept credit cards.

The only similar mode of payment would be your maestro debit card issued by your bank.

This video explains exactly how the process works.

Another advantage of Twint is that you can use it to send money to someone else’s mobile phone — as long as they also have Twint. And you can receive money the same way.

And there are no fees or charges for this service.

How does Twint work?

Anyone can use Twint, but you need a Swiss bank account or a credit card and, of course, a smartphone.

According to Twint website, you need a smartphone with either an iOS (from version 12.2 and upwards) or Android (from version 7 and upwards) operating system and Bluetooth capability (from version 4.0 and upwards).

“It is generally not possible for Twint to be used on Apple devices with an operating system older than “iOS 12.2” or on Android devices with an operating system older than “Android 7”. On Android devices without access to the Google Play Store (e.g. on certain HUAWEI models), the use of Twint app is also not possible”.

But If you have a compatible phone, installing Twint is easy.

Swiss banks offer their own version of the app, and you can download it directly from your bank’s website.

Then, when you use Twint to make a payment, the amount is debited directly from your bank account or credit card.

By the same token, if you receive payment from another Twint user, the money is automatically deposited in your account.

And you are not limited to just one Twint app.

If you have accounts is several banks, or have more than one credit card, you can install and use all of them.

READ MORE: How to open a bank account in Switzerland

Can Twint be used to make payments and receive money from abroad?

For the moment, Twint can be used solely in Switzerland and payments can be made only in Swiss francs – although this may change in future. 

“We are, however, working closely with providers in other countries to develop an international and multi-currency solution”, according to Twint website.

You can find more information about Twint here.

READ MORE: Which bank is best for Americans in Switzerland?

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