Magazine article Marketing

Helen Dickinson on Retail: Switch to Maestro Will See Store Owners Suffer

Magazine article Marketing

Helen Dickinson on Retail: Switch to Maestro Will See Store Owners Suffer

Article excerpt

You will undoubtedly remember the Access credit card ('your flexible friend') that was phased out many years ago after being taken over by MasterCard. Well, the same fate is befalling the Switch debit card, which is being superseded by the MasterCard Maestro brand that acquired the Switch business from the group of banks that owned it in 2002.

No doubt Switch will join Access as nothing more than a distant memory, but today it is still a well-recognised brand that may take some time to forget. It has certainly grabbed a sizeable share of the UK payments market since its launch in 1987. We can only hope that those TV ads with the penguins slip from our memories a little quicker.

The disappearance of Switch is proving to be a much more painful experience for retailers than it is for consumers. The industry had feared a rise in transaction charges when the changeover to MasterCard took place, and we hear that retailers think it is coming to pass. Although they had received words to the effect that there was nothing to worry about, it seems that retailers feel these assurances were hollow. This all sounds familiar because they thought the same thing happened with Access.

These potential increases appear rather perverse, because one of the main reasons for the change to MasterCard was that the Switch card's infrastructure was inefficient. After its many years of use it was considered to be looking a bit rickety. What was needed, retailers were told, was a radically updated and more efficient system.

It is very strange that this new ownership might bring higher costs. That is not what is supposed to happen with new processes - otherwise, surely nobody would ever update anything. What happened to today's buzzwords in this deal, such as synergies and cost savings through increased efficiencies?

Another argument for changing over to the MasterCard platform was the extra functionality it would bring. Chief among these was the card's international acceptance. But it is highly questionable what value this gives UK retailers. How much more business could a UK retailer expect from accepting such cards in its stores? There does not seem to have been a clamour of people in the past wanting to ditch their Switch cards because they were not accepted overseas.

In fact, this international aspect is a worry to retailers because it is through overseas transactions that a great amount of card fraud is perpetrated. …

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