The Swiss National Bank and SIX Interbank Clearing announced the launch of a new solution for instant payments.
The mentioned functional offer for consumers of financial services provides 60 lenders with the opportunity to receive and process instant payment transactions. The relevant information is contained in the press release of the Swiss National Bank, which was published last Wednesday, August 21.
Also in the specified press release, special attention is drawn to the fact that the new instant payment service will be extended to all financial institutions that, as part of their activities, carry out retail operations of the corresponding functional category. It is expected that this plan will be fully implemented by the end of 2026.
The press release also draws attention to the fact that those financial institutions that are already involved in the practice of making instant payments cover more than 95% of retail transactions of the corresponding functional category in Switzerland.
As part of the use of the new solution, private individuals and companies can perform payment operations account-to-account (A2A). The press release notes that the relevant transactions are carried out within a few seconds. Special attention is also drawn to the fact that these offers related to payment transactions are available to customers at any time, including on public holidays.
The press release notes that the new solution provides significant benefits to private individuals, companies, and commercial financial institutions. In this context, attention is focused on the fact that as a result of using shorter settlement chains, such a positive factor as reducing the level of risk is formed. The press release also notes that for companies and commercial financial institutions, the practice of instant payments generates an expanded space of opportunities. In this case, additional opportunities are implied for automating processes and solving the problem of linking the functional environment with other services.
The Swiss National Bank separately noted that the implementation of money transfers within the framework of procedures that belong to the categories of standard mechanisms and traditional algorithms will continue to be available to consumers of financial services. This statement means maintaining such a level of demand for a kind of classic transaction, which is sufficient for the expediency of continuing to provide such services.
The Swiss financial regulator and SIX Interbank Clearing adhere to this vision of the development of the country’s payment environment, in which it is expected that instant operations to become established in the short term. Both sides of the cooperation are also committed to the formation of a large-scale non-cash transaction space. This aspiration corresponds to the global tendencies of digitalization of the payment industry, which implies minimizing operations using cash with the prospect of a subsequent complete rejection of consumers to classic payment methods.
It is worth noting that SIX Interbank Clearing announced the launch of a new instant payment service at the beginning of the current year. In mid-January, a press release was issued containing a statement on the relevant plan. At that time, SIX Interbank Clearing noted that the new service would support the future viability of payment traffic in Switzerland. Also in this context, a statement was made that the announced solution will be available to both Swiss consumers and businesses.
SIX Interbank Clearing, as part of the description of the advantages of instant payments, noted the ability of customers to receive immediate access to incoming funds at any time of any day. Positive aspects such as additional opportunities for the implementation of goals related to the simplifying of the liquidity management process and solving tasks aimed at improving the security of settlements were also mentioned.
The new real-time payment scheme is called SIC5. It is worth noting that this functional platform complements the already existing financial services system in Switzerland called TWINT. In the relevant context, there are full-fledged arguments in favor of statements about the significant expansion of the country’s fintech ecosystem.
According to statistics cited by the media, 377 million payment transactions related to the real-time operations category were made in Switzerland in 2022. According to preliminary estimates, by 2024, the corresponding figure will grow to 1.4 billion transactions. If this forecast is confirmed by reality, a compound annual growth rate of real-time payments will be 29%.
As we have reported earlier, Swiss National Bank Fixes High Demand on Cash.
