I don’t know if you saw it, but I had missed the news: the Maestro card is slowly dying…!
My first reaction was: “Arghhh, how am I going to pay at the local grocery store now? Will I always need to have cash with me?
And I’m not the only one living in the countryside with this constraint it seems, considering the emails I received from readers when Zak recently announced that they were replacing their Zak Maestro card with a new VISA debit card.
Maestro card fees, and debit card fees, for Swiss merchants
As I’ve been investigating this whole thing for the past several months, I’ve learned a plethora of new and interesting stuff, at least for any self-respecting personal finance geek ;)
Until COVID, my grocery store had this policy:
Credit cards take about a 2% fee for each transaction. For example, CHF 0.60 for a transaction of CHF 30.
The Maestro card, on the other hand, “only” charges a flat fee of CHF 0.26 per transaction. So I only accept Maestro cards or cash to avoid losing too much in fees.
But the COVID has passed by, and with it, more and more people willing to buy things on the internet. Except that the Maestro card is not often accepted for online payments.
As a result, one bank after another, we saw more and more debit cards arrive.
So much so that since 2020, many agree that the Maestro card will disappear.
Except that, as a happy resident of the countryside, I was concerned…
Indeed, my local Swiss merchant explained to me: “The Maestro card is still the best for us, because the flat fee of CHF 0.26 per transaction is ‘reasonable’. But the banks are really shameless with their new debit card that they are pushing to use, as they took the opportunity to introduce new fees:
- For Mastercard Debit: CHF 0.10 per transaction + 0.49% of the transaction amount
- For VPAY and Visa Debit: CHF 0.10 per transaction + 0.96% of the transaction amount
He continued to explain with examples:
Transaction of CHF 30
| Card | Merchant fees in CHF |
|---|---|
| Maestro | 0.26 |
| Mastercard Debit | 0.25 |
| Visa debit | 0.39 |
Transaction of CHF 15
| Card | Merchant fees in CHF |
|---|---|
| Maestro | 0.26 |
| Mastercard Debit | 0.17 |
| Visa debit | 0.24 |
For small amounts that represent a large part of my turnover, it is quite interesting.
But imagine for my cousin who owns an electronics store near Fribourg… for a large amount like for example a transaction of CHF 1'000, it gives you this:
| Card | Merchant fees in CHF |
|---|---|
| Maestro | 0.26 |
| Mastercard Debit | 5.00 |
| Visa debit | 9.70 |
The Swiss price monitor, aka Monsieur Prix, comes into play
We are really lucky in Switzerland, when we see how well we are defended as consumers compared to other countries where corruption and monopolies rule.
According to Wikipedia: "The Price monitoring is the Swiss federal office responsible for investigating and identifying possible abuses of the prices of goods and services. It was founded in December 1972 and reports to the Federal Department of Economic Affairs.”
The article continues:
"‘Monsieur Prix’ is the title most often used to designate the ‘price supervisor’ in charge of the office. His role is to check the evolution of prices on the Swiss market, to detect cartels that could develop and to inform the population. Its tasks are governed by the federal law on price monitoring (LSPr). In the case of an abusive increase or decrease in the price of a good or service, he can put pressure to bring it back to a previous level. In 2007, the work of ‘Monsieur Prix’ would have allowed to save the population 290 million Swiss francs thanks to his interventions.”
Monsieur Prix has made it his mission to bring Worldline/Six Payment Services Ltd (aka SIX) — Switzerland’s leading payment service providers — to their senses.
And he succeeded, as announced in its latest newsletter of 19.08.2021 (page 8):
In order to limit the significant increase in fees for high-value payment transactions, the Price monitor has taken action and has reached an amicable settlement with SIX for a fee cap (CHF 2.- for Mastercard Debit and CHF 3.50 for Visa Debit and VPAY). This protects merchants selling more expensive goods such as bicycles or household appliances from excessive fees, for example.
It also states:
“However, it should be pointed out that the majority of operations involve relatively small amounts. In 2019, 50% of the transactions were for an amount of CHF 30 or less. During the pandemic, it is even likely that this share of small transactions, which benefit from this new model, has become higher. The Price monitor estimates that this new model would make about 75% of the new Visa debit card transactions cheaper and more than 50% of the Mastercard debit card transactions cheaper.”
As a result, since this announcement, my countryside store owner has explained to me that he and all the independents stores he knows now accept debit cards without a second thought. Phew!
Zak discontinues its Maestro card, and launches its VISA debit card
As a regular user of Zak’s Maestro, I had a few cold sweats when they announced that they were discontinuing it.
But after my in-depth analysis and discussions at the village store, I was reassured. I won’t need to look for a new bank :)
And you, did you have had debit card rejections since the fees were capped?
PS1: FYI, Zak’s new VISA debit card replaces the previous two — handy if you were using their Maestro and digital credit card. As with many banks in 2021, their new debit card does not charge fees on foreign transactions abroad, and is usable with Apple Pay, Google Pay or Samsung Pay.
PS2: as usual, I only recommend products I actually use. And for Zak, you still have access to a CHF 25 welcome bonus by using the blog code “Y06JPR” (make sure you put the code in capital letters in order for it to work)
Real estate investment with 55% guaranteed return
Nicole's side business has become her main income...
