Swiss companies and consumers can now enjoy the benefits of instant electronic payments, joining other European financial centers where ultra-fast transfers are increasingly popular. Instant payments allow credit transfers within 10 seconds, eliminating the waiting time for transactions to clear, which can take days. This system has been in use in Europe since 2017 and in the US since last year, showcasing its efficiency and convenience.
According to the European Central Bank, the use of instant payments in Europe has increased significantly, from 5.2% of all credit transfers in October 2019 to 17.8% in February 2020. In Switzerland, around 60 financial institutions are now equipped to receive and process instant payments, covering over 95% of Swiss retail payment transactions. This was made possible through a collaboration between the Swiss National Bank and financial systems provider SIX.
The Swiss National Bank plans to have all financial institutions in Switzerland on board with instant payments by the end of 2026. Despite the rise of mobile payment apps, physical cash remains the most accepted method of payment at companies with physical points of sale in Switzerland. The launch of instant payments represents a significant milestone in advancing cashless payments in the country, according to the SNB.
Instant payments offer various benefits, including reducing settlement risk, as transfers are instantaneous and final. Both parties involved have real-time access to their account balance, facilitating better planning and budgeting. This medium-term establishment of instant payments is expected to boost economic development, as companies can quickly reinvest the money they receive. Overall, the adoption of instant payments in Switzerland signals a positive step towards modernizing the country’s financial infrastructure.
