Cash remains in vogue in Switzerland
Cash remains the preferred method of payment in Switzerland, although during the pandemic wealthy citizens increasingly turned to card payments and payment applications. That’s according to a study by the Swiss Central Bank, quoted by Reuters. About 43% of one-off payments for purchases in supermarkets and restaurants are made in cash, which remains the most popular payment method in Switzerland, according to the study. However, cash has lost its position, as its share amounted to 70% in 2017.
“In terms of the number of payments made, cash continues to be the most commonly used payment instrument by the Swiss population,” said Fritz Zurbrug, vice president of the Swiss Central Bank.
“Compared to 2017, their share has decreased significantly. The pandemic has given additional impetus to this transition from cash to cashless payment methods,” he added.
One third of the payments are made by debit cards, which is an increase compared to the situation four years ago, when 22% of payments in the country were through this method. Credit cards have also increased in popularity over the period. The increase in contactless payments contributes to the rise of card payments.
Mobile payment applications such as Twint and Paypal account for 5% of transactions in Switzerland, while in 2017 their share was almost zero.
“Cashless payment methods have begun to be considered, at least in part, as easier to use than cash,” according to a study conducted in August-November 2020. The growth in online shopping has fueled the popularity of maps and apps during the pandemic, as well as the fact that consumers are shopping more from grocery stores during the pandemic.
As the Swiss slowly withdraw from cash, banknotes in circulation are growing. This suggests that cash is used to store value, according to the Swiss central bank.
The report states that people in the country have stored about 10 billion francs or 12% of banknotes in circulation on rainy days.
Nearly 70% of the population keeps cash at home or in a safe, with most (77%) holding up to 1,000 francs to meet unforeseen expenses or to store value in the long run.
Negative interest rates of the Swiss central bank are not a factor, as most people are not directly affected by them.