Market Analysis

Switzerland has taken a significant step toward becoming a cashless society with the introduction of its instant payment scheme, enabling fund transfers to be completed in seconds, according to announcements made by the Swiss National Bank (SNB) and financial infrastructure operator SIX on Wednesday.

Instant payments are a form of credit transfer that allows funds to be available in the recipient's account within 10 seconds of the payment order, as opposed to the traditional method that can take several days to process.

Currently, around 60 financial institutions are equipped to handle instant payments, covering over 95% of retail payment transactions in Switzerland, the SNB reported following the scheme's launch on Tuesday.

In the coming months, additional banks are expected to roll out similar services, with the goal of having all financial institutions in Switzerland fully integrated by the end of 2026.

"The launch of this market initiative marks a key milestone and demonstrates the collective commitment of stakeholders to the future of cashless payments in Switzerland," the SNB stated.

While traditional payment methods will remain available, the central bank anticipates that instant payments will become widely adopted in the medium term.

The SNB and SIX initiated this project in November 2023 to align with Europe and the United States, which have offered instant payments since 2017 and last year, respectively.

Instant interbank payments reduce settlement risk by ensuring that debits and credits are instantaneous and final, providing both parties with real-time account balances. This capability simplifies financial planning and budgeting.

Additionally, the acceleration of payment processes could stimulate economic growth, as businesses can reinvest received funds more quickly.

Paraphrasing text from "Reuters" all rights reserved by the original author.