UBS has decided to sell its 50 percent stake in the Swisscard joint venture to American Express, transferring full ownership to the latter. This move comes after UBS acquired Credit Suisse, which previously held an equal share in the venture.
The transition is not expected to immediately affect existing Credit Suisse credit card clients. UBS plans to offer its own range of credit cards and services to former Credit Suisse clients, while also stating that the operational processes associated with Swisscard do not align with its current strategic direction.
With the acquisition of Swisscard, American Express aims to strengthen its presence in the Swiss market. The company intends to continue expanding its business in Switzerland and ensure that merchants can accept cards issued by Swisscard without disruption.
Swisscard has assured its clients that the credit card portfolios marketed under the Credit Suisse brand will transition to UBS. Swisscard will also continue to issue cards under the licenses of American Express, Mastercard, and Visa.
The credit card market in Switzerland is diverse, with various issuers including UBS, American Express, SIX, Bonuscard, Cembra Money Bank, Postfinance, and Corner Card. Cantonal banks, Viseca, and Raiffeisen Bank also contribute to the competitive landscape.
Credit cards rank second in terms of turnover, with approximately 20 percent of total expenditure conducted through credit cards. Mobile payments have also gained popularity, generating turnover comparable to credit cards.
Following the announcement of UBS's divestiture, the bank's shares experienced a temporary decline, as did American Express shares. The implications of UBS's shift towards its own credit card offerings and American Express's full ownership of Swisscard remain to be seen.
The evolving landscape of credit card issuance in Switzerland highlights the importance of adaptability and strategic foresight for financial institutions.