By John Revill
ZURICH (Reuters) -Swiss businesses and consumers can now make instant electronic payments, catching up with other European financial centers where ultra-fast transfers are becoming increasingly popular.
Instant payments enable transfers within 10 seconds of a payment being made, instead of waiting days for the transaction to process. They have been in use in Europe since 2017 and in the US since last year.
In Europe, the use of instant payments increased from 5.2% of all transfers in October 2019 to 17.8% in February this year, according to the European Central Bank.
About 60 financial institutions can receive and process instant payments, representing more than 95% of Swiss retail payment transactions, the Swiss National Bank said on Wednesday, after launching its program with financial systems provider SIX.
More banks will announce similar services in the coming months, the SNB said, with all financial institutions in Switzerland expected to be on board by the end of 2026.
Despite the rise of mobile payment apps, the Swiss remain attached to physical cash, which is still the most accepted means of payment for companies with physical points of sale, according to a survey by the SNB earlier this year.
“This market launch represents another important milestone and reflects the collective commitment of stakeholders to the future of cashless payments in Switzerland,” the SNB said.
While traditional payments are still possible, the central bank expects instant payments to become commonplace in the medium term, the central bank added.
Instant payments reduce settlement risk because the transfer is immediate and final, while both parties have a current account balance at all times, making planning and budgeting easier.
Accelerating payments could also boost economic development, as companies can reinvest the money they receive more quickly.
