The Swiss prefer to pay for their online purchases by invoice. A full 46.2 percent use the option of paying their invoices only after receiving the goods (Swiss Payment Monitor 2024). However, this popular payment method harbours the risk of delayed or forgotten payments.
In view of this, it is not surprising that more than one in eight people in a Swiss household live with at least one overdue payment (Swiss Federal Statistical Office). Those who fail to pay even after several reminders are quickly confronted with debt collection proceedings. Every year, around 2.9 million payment orders are issued in Switzerland and 1.58 million debt collection cases with a volume of over CHF 1.27 billion are handed over to members of the Inkasso Suisse association.
The debt collection business is traditionally dominated by established players who often rely on traditional methods such as letters and telephone calls. However, this conservative approach often fails to put the consumer at the centre. The impersonal, analogue approach and inflexible payment methods can have a lasting negative impact on the relationship between consumer and seller.
‘The Swiss debt collection market has tended to be traditionally conservative. With an innovative ‘digital-first’ approach and a personalised debt collection solution, we are setting ourselves apart from the conventional approach. Our aim is to make interaction with consumers as user-friendly and effective as possible. That’s why we use AI and behavioural science to make it easier for them to repay their outstanding amounts and achieve higher recovery rates through optimised digital processes. Consumers are just as important to us as our customers,’ explains Marko Kusigerski, Managing Director of PAIR Finance Suisse.
These factors can strengthen customer relationships in the debt collection process
When selecting a debt collection provider, companies should keep a number of consumer preferences in mind. This can help them to cater specifically to the needs of their customers and strengthen the customer relationship in the long term. The following factors are important:
- Digitalisation:
According to the IMD World Competitiveness Ranking 2023, Switzerland ranks fifth worldwide in terms of digitalisation. This leading position shows that the Swiss market is ready to utilise digital products that integrate the latest technologies. It is therefore essential for companies to rely on innovative digital solutions in order to fully utilise the advantages of this highly developed infrastructure. - Mobile-first:
The high level of digitalisation is also reflected in the strong use of mobile-first offerings, which is becoming increasingly important, for example in mobile commerce (m-commerce). In 2022, over half of all consumers in Switzerland (55%) made their purchases via mobile devices (Statista). Mobile-friendly solutions and offerings that provide a simple and intuitive user experience are therefore crucial in the Swiss market. - Personalisation:
As the level of digitalisation increases, so does the demand for personalised and tailored experiences (Customer Management Study). This need extends not only to the purchasing process itself, but to the entire customer journey – from individual product recommendations to communication in the event of outstanding payments. A personalised approach not only increases customer satisfaction, but also strengthens long-term customer loyalty. - Trust:
When it comes to trust, Switzerland places a particularly high value on data protection. The comprehensive data protection laws, which are based on the European GDPR, reliably protect consumers’ personal data. Online retailers must ensure that they adhere to strict data protection standards in order to gain and maintain customer trust. Transparent data protection guidelines and secure payment options are therefore also a must for debt collection procedures.
Tradition meets digital innovation
In Switzerland, debt collection is characterised by a number of specific peculiarities. For example, Swiss law does not provide for direct legal services or a remuneration law for debt collection companies. There are also no statutory regulations on the amount of debt collection costs. The Swiss debt collection market is largely organised in the Inkasso Suisse association, to which many established market participants belong. Due to the lack of a licence requirement for debt collection companies, the legal basis for debt collection services is minimal. As a result, debt collection in Switzerland is less formalised and regulated. Many debt collection companies are guided by the Code of Conduct issued by Inkasso Suisse, which also contains recommendations on the level of costs, which are graded according to the size of the main claim.
With its AI-based debt collection approach, PAIR Finance has set itself the goal of meeting the needs of consumers and combining proven tradition with digital innovation. In Switzerland, trust in AI is relatively high compared to other European countries and 46% of companies already use AI in the workplace (Inside IT). PAIR Finance also uses AI to provide a personalised and mobile debt collection experience in combination with behavioural science. By analysing large amounts of data, AI can identify patterns in consumer behaviour and suggest optimal strategies for action. This not only improves the success rate, but also enables a personalised approach, which leads to a higher repayment rate.
While traditional methods are often still based on paper, PAIR Finance relies on modern communication via email or SMS to reach consumers at the optimum time. The frequency of contact is precisely adjusted using behavioural analyses in order to communicate only as often as necessary. This modern, customer-centric approach allows consumers to conveniently settle outstanding debts digitally, no matter where they are. In addition, PAIR Finance offers a selection of payment methods, including Twint, to make the payment process even more convenient.
Success stories and key figures: Digital debt collection in practice
Mobility
Carvolution, the Swiss pioneer in car subscription, successfully uses AI and behavioural science to sustainably improve the debt collection experience for its consumers. With the PAIR Finance debt collection solution, Carvolution has introduced a digital and personalised process that makes it easier for customers to repay outstanding amounts in an uncomplicated manner. This innovative strategy not only strengthens customer relationships, but also leads to a significant increase in the recovery rate.
Bernhard Drüner, Chief Financial Officer at Carvolution, emphasises the benefits of this partnership: ‘Carvolution greatly appreciates the fast and efficient cooperation with PAIR Finance. The ease with which we can upload cases and the constantly transparent overview of our customers’ status in the debt collection process are of great importance to us. We would particularly like to highlight the personalised and targeted communication with consumers, which enables us to respond individually to our customers’ needs. With its customer-oriented approach and high level of digitalisation, PAIR Finance provides us with ideal support in our receivables management. We look forward to continuing our successful partnership.’
E-commerce
Zalando, one of Europe’s leading e-commerce providers, also relies on the expertise of PAIR Finance to make its debt collection processes both efficient and customer-friendly. With an innovative approach focused on digitalisation and customer centricity, PAIR Finance has delivered visible successes for Zalando Payments.
Kai-Uwe Mokros, Managing Director of Zalando Payments, describes the collaboration: “PAIR Finance redefines receivables management with its innovative, digital-first approach. Their ability to balance efficiency with customer focus has significantly impacted our operations. In Switzerland, PAIR Finance has supported us in optimising our debt collection processes through personalised customer communication in three languages, creating a seamless and unique customer experience. We look forward to further sharpening our customer focus and building trust with our Swiss customers – Grazie, Merci, and Danke!”
The success of PAIR Finance Suisse is also reflected in the key figures:
- 90% of consumers with outstanding receivables are successfully reached within 90 days
- 69% of consumers respond to the first contact within the first 30 days
- Local payment methods such as Twint increase willingness to pay by 15%
These figures and the feedback from companies such as Carvolution illustrate how modern technologies and a personalised approach can support the debt collection process.
Data protection in Switzerland: a special focus
In Switzerland, data protection is of paramount importance, especially in a sensitive area such as debt collection. With the introduction of the revised Federal Act on Data Protection (FADP) on 1 September 2023, Switzerland has further tightened its already strict data protection standards.
‘For the debt collection process, this means that every step – from data transmission to communication with consumers – must comply with strict data protection requirements. This requires not only a deep understanding of the legal framework, but also the use of state-of-the-art technologies that enable data to be processed securely and transparently,’ comments Nicole Beranek Zanon, partner at HÄRTNING Attorneys at Law and data protection consultant at PAIR Finance Suisse: ’Data protection is not only a legal requirement in Switzerland, but also a factor of trust. For us, this means that we ensure that the sensitive data of our customers and consumers is protected in the best possible way.’
Unlike in many other countries, Swiss legislation is characterised by a particularly high level of privacy protection, which is based on the provisions of the European General Data Protection Regulation (GDPR), but also sets specific national priorities. This is particularly relevant when dealing with sensitive customer data that is processed in the debt collection process.
Conclusion
Success stories like the one of Carvolution show that a modern, AI-driven approach to the debt collection process can not only strengthen customer relationships, but also achieve significant improvements in the recovery rate. By combining a personalised approach, digital efficiency and a deep understanding of market specifics, PAIR Finance Suisse is setting new standards in digital debt collection and proving that a progressive approach can be extremely successful in a traditionally conservative market environment.
Would you like to find out more about how digital debt collection works in the Swiss market and are you looking for a strong partner with an AI-based debt collection solution? Our team will be happy to advise you.
