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What payment system enables a Swiss two-sided online platform to simply and LEGALLY collect payments from their clients and pay both themselves and the providers of the client service - like Airbnb collecting payments from tenants and paying home owners?
EXECUTIVE SUMMARY
One of the benefits of operating in a two-sided online platform, as a provider, is the availability to "reach many customers". Providing services to these clients/customers would require some payment to be made in regards. To make these payments, a platform developer must take into consideration the payment systems to be used by customers to pay providers for their services; these payment systems must be within the laws of the said jurisdiction. In Swiss, the following payment systems can be used simply and legally to collect payments from clients and pay both the platform operator and the providers of the client service: Credit Card, SOFORT, PayPal, Post Finance, Swisscom, TWINT, Migros Bank E-Pay. Below I have profiled each payment system.
FINDINGS
On July 07, 2016, Visa Inc. announced that Visa Cardholders in Switzerland could use Apple pay to pay money. Apple pay can be used wherever "Visa contactless" payment is accepted. The addition of Apple pay to the already popular credit card method of payment will enable Merchants to add the Visa payment option in their website, from where customers will click the payment option and continue with the payment.
SOFORT has been approved as a safe system of payment; even being ISO 27001 certified by TÜV Süd. TÜV Süd is “a leading technical service organization in Switzerland.” It works this way:A customer goes to the shop’s website, clicks on services and selects 'Pay now with online banking'. He then selects his bank, login his credentials, enter OPT code sent to his phone and confirm the transaction. These details are sent to his bank which remits the amount to the merchant.
PayPal is one of the most famous payment systems accepted in most countries including Switzerland. Under the PayPal system, both the customer and merchant are required to register an account. Both can access the services either by downloading the PayPal app (or going to the website). A Merchant will then add the PayPal option on their website. A customer will click the store from which they want to buy, and proceed to checkout by picking the PayPal option. The transaction will then be automatically executed.
Post Finance allows Swiss customers to "receive and pay invoices electronically." To use Post Finance, customers must have an account with e-finance. They will then register with invoice issuer, after which they will receive e-bill through e-finance, enter date and account to pay and thus pay the invoice. When there is a new transaction, information is relayed via push and email notifications. This payment method does not charge payment fee.
This system is only available for Switzerland "residential customers" who have a mobile subscription with Swisscom, NATEL easy customers and M-Budget customers. With Swisscom, customers can make payments online and in turn the merchants are paid for their services. A customer will select a product in the Easy-pay partner's online shop or app. Then a "Swisscom page" (checkout page) will display an “overview of the purchase” e.g. price information, provider etc. then the client will finalize the payment by clicking “Buy”.
TWINT also refers to itself as "Switzerland digital wallet". It is supported by most Swiss banks. Customers can make convenient and secure payments with their smartphones at online shops and apps shops. Customers download the app and link it to their bank accounts or credit cards to make payments. Merchants are required to pay a fee per transaction and a one-time fee for TWINT Beacons and will receive money two days after the transaction is completed.
Another system of payment is the Migros Bank E-Pay which can be used easily, for collections for the online shop. To use the E-pay services, merchant will be required to open an account with Migros Bank and integrate the payment system on their website. Customers will then click services or goods required from the shop website, and then proceed to enter Migros Bank as payment type, then fill in their E-pay ID and confirm the transaction.
In conclusion, as mentioned above, some payment systems relevant to Swiss providers in a two-sided online platform are: Credit Card, SOFORT, PayPal, Post Finance, Swisscom, TWINT, and Migros Bank E-Pay.