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Change banks without changing account numbers: minister

Letting Swedes hold on to their account numbers when switching banks is one way to put pressure on banks thought to be gouging customers with high margins on variable rate mortgages, financial markets minister Peter Norman said Thursday.

Change banks without changing account numbers: minister

Following recent attention on the gap between banks’ mortgage rates and Sweden’s benchmark interest rate, the government on Thursday tasked the Swedish Financial Supervisory Authority (Finansinspektionen) with taking a closer look at the margins banks’ are earning on their variable rate mortgages.

One possible reform under consideration is the option of allowing bank customers to take their old account numbers with them when changing banks.

“It would make things easier and more practical. I’d like customers to become more active, and if we can help with that, we should,” said Peter Norman to news agency TT.

As many Swedes pay most of their bills and receive their salaries via direct, electronic deposits into their accounts, switching banks can bring with it an added degree of administrative burden for the customer.

Keeping one’s account number, however, would help relieve some of the hassle, Norman believes.

He explained that one of the most important factors for putting pressure the bank profits derived from margins on home mortgages is by increasing competition through making it easier for people unhappy with their current bank to switch to a different one.

“Yes, I do think so. Today it’s seen as a complicated process,” he said.

The possibility of customers keeping their old account number when switching banks was not popular among Sweden’s banks, however.

“It’s not of much use to customers, who don’t actually need to memorize their number,” said Marie-Louise Ulfward, lawyer at association Swedish Bankers (Bankföreningen). to TT.

According to Ulfward, the use of such a reform is unproportional to what it would cost to implement.

“It would be a huge cost to the financial system,” she said.

There are roughly 40 million bank accounts, and all these numbers would have to be changed in all customer databases before any of them could be moved.

Studies have shown that financial crises are possibly the most devastating form of crisis to hit a country, wrote Peter Norman in a debate article published in national newspaper Expressen on Thursday.

“They make their way from banks and into households and companies, putting important socioeconomic functions such as saving and loan opportunities out of play,” he wrote.

Because of this, Sweden’s centre-right government has suggested higher capital requirements for the country’s four major banks. This means raising the amount of money banks must have to cover withdrawals at any given moment.

Finance minister Anders Borg said on Wednesday that he expects banks to lower their margins on mortgages by lowering mortgage rates, since all indications point towards the economy braking heavily.

“The banks are going to have a tough time next year if they don’t start bringing margins down now, it’s unacceptable that they remain on the levels they’re at now,” said Borg to TT.

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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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