Following this announcement, Swiss companies and clients will have the possibility to make instant electronic payments, which will allow the region to align with other European financial centers where this type of transfer is increasingly popular.
Instant payments were developed in order to allow credit transfers to take place within 10 seconds rather than making the customer wait for days for the transaction to clear. In the region of Europe, the use of instant payments has risen from 5.2% of all credit transfers in October 2019 to 17.8% in February 2024, according to the European Central Bank.
In the following months, more banks and financial institutions are set to announce similar services and solutions, with all enterprises in Switzerland being expected to be on board by the end of 2026. In addition, despite the rise of mobile payment applications, the Swiss still remain attached to physical cash, which remains the most accepted method of payment by companies and firms with physical points of sale.
The market launch represents a further important step in the strategy of accelerating the integration of instant payments, while also reflecting the collective stakeholder commitment to the future of cashless transactions in the region of Switzerland.
While traditional payments and transactions remain possible to access for customers, the central bank also expects instant payments to become established in the medium term. Instant payments are set to also reduce settlement risk as the transfer is instantaneous and final, while both parties are also allowed to have an up-to-date account balance at all times. This process is also set to make planning and budgeting easier and more secure for customers and businesses as well. At the same time, the overall speeding up of payments could also boost economic development, as companies and firms can reinvest more rapidly the money they receive.
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