Payments companies in Switzerland are losing significant amounts due to reduced consumer spending due to a collapse in hotels and general tourism, according to GlobalData.

Swiss tourism revenue is expected to shrink by 18% in 2020, according to the Valais University of Applied Sciences and Arts. This would mean the hotel industry alone losing in excess of $2bn during March and May. This represents a significant decline in consumer spend, which is hurting the payments sector.

As a result, GlobalData has revised its forecasts down for total transaction value, from a compound annua; growth rate (CAGR) of 5% up to 2023, to 3.5%. Unlike most other countries, though, the value of ATM cash withdrawals is still expected to grow at a CAGR of 1.4% up to 2023. GlobalData expects the value of card payment transactions to rise at a higher rate of 4.2%.

GlobalData payments analyst, Ravi Sharma, commented: “Consumers will shift from cash-based payments tools, particularly on-contact tools, when transacting in stores as they aim to avoid exposure to disease vectors, such as cash ad point of sale (POS) terminals. Therefore, the use of contactless cards and mobile wallets such as TWINT, Apple Pay, Google Pay and Samsung Pay. To support the use of contactless payments, the limit has temporarily been lifted from CHF40 ($41.33) to CHF80 ($82.66).

“Consumers are able to buy essentials from retailers such as Coop and Migros. They are offering promotional activities, such as buy one get one free and seeing huge demand. Consequently, online payment solutions, such as Paypal and Masterpass will benefit.”