Switzerland has taken a substantial step toward becoming a cashless society with the launch of its instant payment scheme. The Swiss National Bank (SNB) and financial infrastructure operator SIX made the announcement on Wednesday. This new system allows funds to be transferred within seconds rather than waiting days for transactions to clear.

Launching Instant Payments

Instant payments work as credit transfers, with funds available in the recipient’s account within 10 seconds of the payment order being made.

According to the SNB, around 60 financial institutions can now process and receive instant payments. This development covers over 95% of Swiss retail payment transactions. The scheme was launched on Tuesday.

The central bank expects more banks to adopt similar services in the coming months. The SNB indicated that all financial institutions in Switzerland are expected to offer instant payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term by the end of 2026.

Instant payments were launched in the Swiss market on 20 August 2024. Instant payments allow private individuals and companies to perform account-to-account transactions with immediate execution and final settlement in seconds.https://t.co/RdiupYG3Sm pic.twitter.com/UZkMUvr3o3

— Swiss National Bank (@SNB_BNS) August 21, 2024

“This market launch represents a further important milestone and reflects the collective stakeholder commitment to the future of cashless payments in Switzerland,” the SNB said.

Earlier, SIX, the Swiss National Bank (SNB), and six commercial banks launched a pilot project exploring the use of tokenized central bank money, known as wholesale central bank digital currency (wCBDC), as reported by Finance Magnates.

The initiative, referred to as Helvetia Phase III, represents the first application of wCBDC for settling digital securities transactions in Swiss Francs. The pilot will take place on SIX Digital Exchange, a regulated financial market infrastructure for digital assets built on Distributed Ledger Technology.

Instant Payments Reduce Risks

Though traditional payment methods remain available, the SNB believes instant payments will become the standard in the medium term. The central bank and SIX initiated the project in November 2023, aiming to keep pace with Europe and the United States, where instant payments have been available since 2017 and 2022, respectively.

Instant payments between banks reduce settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term risks. The debit and credit occur instantaneously, providing both parties with up-to-date account balances.