Swiss Instant Payments: How and When Will Payments Work “Instantly”?

Thanks to global e-commerce, consumption takes place around the clock – and with smartphones, from anywhere. The term “business hours” has no meaning in the digital space: It’s shopping and streaming, all nonstop, and all instant.

Of course, in return we have to pay for the products and services purchased. But how quickly does this payment actually take place? Mentally, we immediately “deduct” the money spent. From our perspective, the money now belongs to the payment recipient. In reality, in Switzerland, there’s a delay before the amount owed arrives in the recipient’s account. That wait can be up to a few hours after the purchase, a day, or even longer, depending on whether I felt like shopping during the day, at night, during the week, on the weekend, on a workday, or on a public holiday.

This delay doesn’t just happen with e-commerce, but also at the store checkout, and with credit transfers via e-banking. Even with the Swiss mobile payment solution TWINT, where I can send money – up to a defined limit – directly to other users, the immediacy is only simulated. The money doesn’t arrive at the recipient’s bank in real time. The bank goes into advance payment, so to speak, where the amount in question is shown as a credit in the customer account ahead of time.

In contrast to this, in the EU, for example, true real-time credit transfers are already a reality. The SEPA Instant Credit Transfer scheme has been the basis for instant payments in euro since 2017.

The payment process currently in place in Switzerland is secure, efficient, and – as described above – generally goes unnoticed by consumers and operates to their full satisfaction. The connection between the bank accounts is established by the Swiss Interbank Clearing (SIC) payment system operated by SIX on behalf of the Swiss National Bank. From a technical perspective, SIC has been able to process payments in real time for decades. But in order for instant payments to function across the entire payments chain, adjustments are also necessary in the operation and organization of the interfaces between the banks and SIX.  

With the release of the fifth generation of SIC at the end of 2023, SIX is laying the foundation for instant payments analogous to the European SEPA Instant Credit Transfer standard. By August 2024, the biggest of the Swiss banks will have to be capable of processing instant payments, with the remaining banks following in 2026.

Even after the technical implementation of instant payments in Switzerland, it will probably take some time for them to become the standard. In the EU, which already has five years’ experience with SEPA Instant Credit Transfer, the share of real time transfers was at 10% at the end of 2021. However, the banks are under no obligation to implement instant payments.

Having the infrastructure is one thing. The readiness to use it is another. In this regard, the future success of instant payments depends on the ability of the consumer goods and services sectors to innovate. Instant payments involve much more than payments via mobile and e-banking. Just think of the Internet of Things — when your fridge won’t just order milk when you’re running low, but also pay for it instantly.