"We will soon only pay with our smartphones".

Werbewoche: Michael Hügli, are you nervous?
Michael Hügli: Why?

In a few days, the launch of Twint will take place. With it, they are introducing a new payment system in Switzerland.
Nervousness is within limits. Our launch has actually already taken place, even if only in selected circles. We have therefore already been able to gather a lot of experience and incorporate it directly into our work. That's reassuring.

"Select circles"?
It is part of our marketing and communication strategy that the Twint community is constantly developing and growing. We have been present in carefully selected test markets since July and have made our brand known in the scenes we want in various cities in Switzerland and have continuously optimized our product. What is happening now is the first communicative step to a broader public.

The competition has already occupied the market with its campaigns.
It depends on what you see as competition and what you understand by "occupying the market". At the moment, we are the only ones in the market with a solution that really works at the checkout and online. The market has to be created before it can be occupied. We are in the process of doing that right now. And in terms of communication, that's where we're using our resources efficiently. If you start too early, the effect fizzles out.

But isn't Postfinance, a financially strong company, also behind Twint?
Our owner is indeed Postfinance. However, we are an independent subsidiary that is supposed to be profitable. As is true for any company, resources are finite and we have to think carefully about how we use them. That's why we need innovative strategies and ideas, especially in communications, but above all we need partners who can work with us on an equal footing and also implement these ideas.

Who are these partners?
On the marketing and communications side, this is primarily the agency Partner & Partner, which is in the lead. In addition, we have other smaller partners who actively support us on our way into the market (editor's note: The brand identity, for example, was implemented by the Bern agency Bloom Identity (Werbewoche.ch reported)).

What is the strategy of your communications agency?
I'll have to backtrack for a moment. The smartphone is becoming the platform for everything - or "mobile first," as they say. We will soon only be using it to pay for things. We're not the only ones who are convinced of this - Apple, Samsung, Google and others know it too, and will soon be trying to launch their payment services. However, we are getting ahead of them because we will secure our strategic position in Switzerland in advance. What's innovative about the communcation strategy, in my view, is that we are focusing on a young urban audience in the first step. For the operators of these stores, we are attractive partners and offer interesting opportunities and support, especially in communicating with their own customers. For the customers, we offer convenience in payment. So both sides benefit. In return, we get an interesting first-user community and a strong positioning of the Twint brand. In the second step, we will address the general public, namely when we slowly cover the market with our strategic partners such as Coop, SBB, various banks and system caterers such as SV-Service. And we are currently taking this step.

How are you positioning Twint in the market?
We position ourselves as the "good guys" because we offer small stores attractive solutions, including much lower fees than credit card providers. These stores introduce Twint and, with our help, continuously acquire new users. We are thus supporting the "digital natives" in Switzerland in their demand for services on their smartphones that are suitable for everyday use, simplifying payment, and soon also offering them attractive value-added services.

What is the core message of your campaign?
On the image level, we mainly want to make it known that here comes something new, big and useful that you better be interested in if you want to be a part of it: Twint - your digital wallet. On the product level, we want people to download the app, get to know it and use it. The merchants are our promoters in this. For the small merchants, attractive conditions in payment transactions are vital for survival, while the big ones save millions. They will all help shape our image and ensure that our digital wallet is used.

How do you plan to get Switzerland to pay with Twint?
First and foremost, we want to change behavior. From paying with cash or credit cards to paying with our app. To achieve this, we need a brand that people trust. We have been working on this every day for the past few months and will continue to invest a lot of energy in the future. As a subsidiary of an established Swiss financial services provider, we have a big advantage here: we know our customers, the market and the legal rules better than anyone else. And our parent company Postfinance is well anchored in Switzerland and has a good image. We are, so to speak, the cheeky, young, urban subsidiary that launches a new trend. People forgive us if we make a few mistakes at the beginning, but they trust us because we are credible and communicate that way.

Critics fear that apps like Twint will make cash increasingly superfluous and thus accelerate its creeping abolition. We are becoming more and more dependent on the Internet and, at the same time, more and more subject to surveillance - how do you counter such concerns?
I think we have been dependent on the Internet for a long time and are also more "monitorable". We already pay "digitally" with all our cards and the credit card institutions, banks and wholesalers have an insight into our consumption behavior. Ultimately, it is up to each individual to decide how much digitalization and transparency they want in their everyday lives. At Twint, we explicitly ask our customers when they register whether we can collect their data and whether they want to receive personal offers in the Twint app. With us, this is not hidden in the general terms and conditions. If the customer agrees, he will benefit from attractive offers from summer 2016. If the customer does not want this, they can switch off the corresponding function at any time.

What is the advantage for consumers with Twint over debit and credit cards?
Consumers want convenience and added value. With Twint, they have their personal ATM in their pocket, 24 hours a day, always at hand, and a rapidly growing number of places where they can pay with it. Plus, they're always in control of spending. With functions such as individual coupon offers, stamp cards and depositing of customer cards, we will soon be creating added value that the other payment methods cannot offer.

How does Twint work technically?
Twint is based on beacon technology for payment at the checkout. This has the advantage that we can support both Android and iOS devices and our target group is therefore much larger. If we had launched an NFC-based solution, all iPhone users - and that is still the majority in Switzerland - would be excluded from our solution. This is because Apple does not currently release NFC to third parties. The Twint Beacon is used so that we can recognize at which retailer and at which checkout the customer is standing. The cash register simultaneously reports the amount to us and we can process the transaction in the secure backend. On the Internet and with the merchant app, the solution for smaller stores, this pairing is done by the customer scanning the QR code. You can top up the Twint account by depositing your postal or bank account once. More and more partner banks support a 100 percent digital process. With all other banks, a one-time direct debit process must be completed. Once the account has been deposited, the Twint account can be conveniently loaded within seconds. The smartphone thus becomes a mobile ATM.

How does Twint make money?
We will earn money through two channels: Via revenue from transaction fees and via value-added services such as mobile couponing or digital stamp cards. We estimate that in the short and medium term we will earn more from transaction fees than from value-added services. In the long term, however, these may become the main source of revenue. But first things first.

What do they have next in the pipeline?
By the end of the year, 3'000 Coop checkouts in major Swiss cities will be equipped with Twint Beacon. By the end of February, Coop will have equipped its entire branch network. We are also in the process of equipping the first vending machines for our payment system. That will make a difference. We will soon be launching new features that go beyond pure payment functions. Already today, the Coop Supercard can be stored in the app to automatically collect Superpoints with every purchase. Other options such as couponing will follow in 2016. The app will then also be a digital wallet for customer cards, coupons, shopping tips, and digital stamp cards. We are also already working on "fastlanes" in stores, because we are convinced that soon twint payers will be much faster at checkout than cash and card payers.

We will also introduce the P2P function for money transfers between acquaintances in November. However, it has second priority for us. You pay at the checkout or in a restaurant every day. That's where the market is, that's where the transactions are. Exchanging money between friends is a "nice to have", which our parent company Postfinance incidentally introduced back in the days when we were still texting with an Ericsson cell phone and didn't know smartphones.

In your TV commercial, they say Twint is just an app. Deliberate understatement?
Our communication is geared precisely to this. Not making promises, but providing evidence. We are only launching our campaign now, when we have a presence at the checkout and on the Internet thanks to more than 50 small retailers, among others, and above all thanks to our cooperation with Coop. Over the next few weeks, Twint beacons will spring up like mushrooms in more and more places or be placed on the store counter. This shows: Twint is there, Twint is tangible and it works. In the end, however, it really is just an app, but it will change our behavior and simplify our lives. That's what I'm saying here and that's what we're saying in our commercial, because it's simply true. That's what makes us credible. Take the self-test. Soon you'll forget your wallet at home out of habit and go to town with just your smartphone. At least, this has already happened to me.

Michael Huegli was responsible for strategic management at Postfinance until summer 2014. Since then, he has been CMO at Twint. In 2014, Twint was founded with the aim of developing a digital wallet for Switzerland. The company is a wholly owned subsidiary of Postfinance.

About Twint

Twint was founded in 2014 with the aim of developing a digital wallet for Switzerland. The company is a wholly owned subsidiary of Postfinance. With Twint, payments can be made via smartphone at store checkouts, in online and app stores, at vending machines and between friends (P2P). No sensitive data flows through the app and money is only transferred via a protected backend. Twint is more than just a payment app, however, and also offers insider tips on shopping, going out and eating out. Loyalty cards and, soon, digital coupons will be automatically taken into account. The ability to use Twint as an online tool for its own mobile marketing campaigns and the low transaction costs are again attractive to merchants, according to the release. The app is free of charge. Users do not need credit or debit cards. The app works independently of telecom providers and can be used on iPhones (from 4S and iOS 7) and smartphones with Android (from version 4.3). Registration via cell phone number is all that is needed to load prepaid credit and start with the first payment.

Interview: Thomas Häusermann