Instant payment options cover 95% of retail transactions in Switzerland. Switzerland is trying to catch up with more advanced instant payment in Europe. Instant payments could reduce payment risks and boost business. Survey shows Switzerland is still stuck with cash payments.
ZURICH, Aug 21 (Reuters) – Swiss businesses and consumers can now make instant electronic payments, catching up with other European financial centres where lightning-fast transfers are becoming increasingly popular.
Instant payments, which allow credit to be transferred within 10 seconds of a payment being made rather than waiting days for a transaction to settle, have been available in Europe since 2017 and in the US since last year.
According to the European Central Bank, the use of instant payments in Europe grew from 5.2% of all direct debit transactions in October 2019 to 17.8% in February this year.
The Swiss National Bank announced on Wednesday that it had launched the scheme together with financial systems provider SIX, enabling around 60 financial institutions to receive and process instant payments, covering more than 95% of retail payment transactions in Switzerland.
The SNB says more banks are expected to announce similar services in the coming months, with all Swiss financial institutions on board by the end of 2026.
Despite the popularity of mobile payment apps, Swiss people remain attached to cash, which remains the most accepted payment method at brick-and-mortar businesses, according to a survey by the Swiss National Bank earlier this year.
“This market entry marks another important milestone and reflects the commitment of all stakeholders to the future of cashless payments in Switzerland,” the SNB said.
The central bank added that while traditional payments will still be possible, it expects instant payments to become established in the medium term.
Instant payments reduce settlement risk because payments are instant and definitive, and both parties always have up-to-date account balances, making planning and budgeting easier.
Faster payments could also boost economic development by allowing businesses to reinvest the funds they receive more quickly.
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Reporting by John Revill; Editing by Miranda Murray and Elaine Hardcastle
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