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What Are the Payment Methods in Switzerland?

The Swiss payment system is experiencing significant changes driven by ongoing digitalization and the adoption of new technologies and standards. Understanding these changes is crucial for businesses, financial institutions, and individuals using the Swiss payment system. This FAQ provides an overview of the current and future state of Swiss payments, including: 

  • Different types of Swiss payment methods
  • Evolution and modernization of Swiss payments
  • QR-bill payment types
  • Implementation of instant payments.

What Are the Different Types of Payments in Switzerland?

The Swiss Interbank Clearing (SIC) payment system operates as Switzerland’s central payment system. SIX Interbank Clearing manages SIC on behalf of the Swiss National Bank (SNB). The system facilitates efficient and secure clearing and settlement of payments in Swiss francs within the country. 

The key Swiss payment methods involve credit transfers and direct debits. 

Credit Transfers

There are several types of credit transfers available in Switzerland for both payments in Swiss francs and other currencies. 

  • SEPA credit transfers: Credit transfers are the predominant cashless payment method in Switzerland. Switzerland, while not a member of the European Union, is part of the SEPA zone. This membership has allowed Swiss banks and PostFinance, a popular financial services provider and part of Swiss Post, to process SEPA credit transfers since the end of January 2008. As a result, customers can efficiently execute domestic and cross-border payments in euros using SEPA credit transfers.
  • Swiss franc non-urgent credit transfers: For non-SEPA credit transfers, the Swiss domestic payment scheme allows the processing of Swiss franc non- urgent credit transfers. It is not possible to specify the desired processing time or urgency of the payment. Swiss banks do not currently support instant transfers, but plan to do so by August 2024.
  • QR-bill payments were introduced in June 2020 to digitize invoices and replace traditional orange (BVR) and red (BV) payment slips. QR invoices offer a range of key features, enhancing the payment process in several ways. All payment details are conveniently contained within a QR code, ensuring efficient processing. They consistently use either the IBAN or the QR-IBAN and facilitate payments in both Swiss francs and euros. With the convenience of digital scanning via smartphone or optical scanner, the QR-bill payment type provides enhanced ease and security for both issuers and payers alike.
  • TWINT is a digital wallet payment system which enables users to make payments from their smartphones through a simple app

Direct Debits

Swiss banks and PostFinance provide various direct debit options for their customers, depending on currency and system requirements.

  • For direct debits in euros, Swiss banks and PostFinance have offered SEPA Direct Debit (SEPA DD) payments since the inception of the SEPA DD scheme in 2009.
  • Direct debits in Swiss francs currently rely on legacy systems, as the modernization of direct debits has not started yet.
  • The main system used by corporates for Swiss franc direct debits is LSV+.
  • Setting up LSV+ requires a debit authorization from the debtor as well as bank accounts for both debtor and creditor.
  • Debtors can object (without giving a reason) to direct debit payments within 30 days after debiting their account.
  • Businesses benefit from automatic invoice collection through LSV+.
  • The LSV+ standard is used by all Swiss banks except PostFinance.
  • PostFinance uses the Swiss COR1 Direct Debit (CH-DD system) for direct debit payments.
    • As with LSV+, businesses using this system benefit from automatically collecting invoices directly from the debtor’s account.
    • Companies need to register for CH-DD direct debit to use this system.

What Is the Evolution and Modernization of Swiss Payments?

The evolution and modernization of Swiss payment methods marks a pivotal chapter in the nation’s financial history. Driven by the worldwide adoption of the ISO 20022 messaging standard, the Swiss National Bank (SNB) in 2015 undertook strategic initiatives and technological upgrades to align Switzerland’s payment systems with global standards and meet the future demands of digital finance.

The Swiss financial community, including banks, corporations, and software vendors, worked collaboratively on this transition, aimed at fully migrating to ISO 20022 by 2018. In 2017, 208 Swiss banks completed the migration to ISO 20022, with the switchover of payment transactions for their business customers completed in 2018. 

While the Swiss financial community made significant progress in migrating to the ISO 20022 messaging standard by 2018, the complete migration, including all types of financial transactions and full adoption by all banks and financial institutions, took additional time. The complex transition involved multiple stages, including the adaptation of domestic and cross-border payment systems to fully support the ISO 20022 messaging standard.

In 2020, as part of Switzerland’s continuing efforts to enhance its payment system, the Swiss National Bank (SNB) and SIX Interbank Clearing Ltd (SIC Ltd) initiated an extensive project to upgrade the Swiss payment infrastructure. The modernization project involves:

  • Migrating from proprietary formats (DTA826, DTA827, etc.) to the ISO 20022 XML version 2019 standard, which automates data processing for simpler, easier payments. Swiss infrastructure is now fully migrated to ISO 20022 XML and also supports XML Pain.001.001.09. Very few Swiss banks are still accepting DTA format because old payment types for local third payments have been decommissioned and replaced by QR-bills, which are only supported via ISO 20022 XML.
  • Removing legacy payment types. 
  • Introducing new payment types, such as instant payments.
  • Supporting digital banking.
  • Facilitating seamless cross-border transactions.

While Switzerland has fully migrated to ISO 20022 XML, Swiss payment methods are undergoing further development. SIX is reaching their standardization and harmonization of payment transaction processing goals in stages, as outlined in their interactive roadmap.

What Is the QR-Bill Payment Type in Switzerland? 

Legacy payment types were decommissioned as part of the plan to harmonize and digitalize the Swiss payment transactions ecosystem. In September 2022, the widely used orange slip (BVR) and red slip (BV) were fully withdrawn from the market. 

Orange Slip are discontinued Swiss payment methods Red Slips are discontinued Swiss payment methods

To transition to digital payments, orange and red slips were replaced by the QR-bill payment type, which digitizes invoices with all of the payment details in a QR code. The Swiss QR code contains the data required to trigger a payment using the ISO 20022 “pain.001” payment type D. The objective is to streamline domestic transfers in Swiss francs (CHF) under a single payment type known as “D.”

QR-bills are a Swiss payment method

While the QR-bill migration is mandatory for domestic payments to suppliers, QR-bills also offer many benefits, enhancing convenience, efficiency, and accuracy in financial transactions:

  • Simplified Payment Process: QR-bills streamline the payment process by allowing users to scan a QR code with their smartphones or other devices to initiate and complete payments quickly and easily.
  • Reduced Errors: With all payment information embedded in the code, QR-bills significantly reduce the risk of errors that often occur with manual entry of payment details, ensuring more accurate transactions.
  • Enhanced Security: QR-bills incorporate security measures that help prevent fraud and unauthorized transactions, providing a safer way to handle payments.
  • Improved Efficiency: The automation of payments via QR codes reduces administrative workload and speeds up payment processing, allowing businesses to manage their cash flow more efficiently.
  • Cost Savings: By reducing the need for paper-based invoices and manual data entry, QR-bills can help lower operational costs associated with billing and payments.
  • Integration with Digital Platforms: QR-bills can be easily integrated into various digital payment platforms and financial systems, facilitating seamless electronic payments and improving overall payment infrastructure.
  • Customer Convenience: For customers, QR-bills offer a convenient and user-friendly way to handle payments, which can enhance customer satisfaction and encourage timely payment of invoices.

How Will Instant Payments Be Implemented in Switzerland?

Instant payments are already a reality in many countries, and steps are underway to implement instant payments in Switzerland. The Swiss Interbank Clearing System, version 5, (SIC5) payment platform, makes it possible to transfer instant payments, facilitating the efficient and secure exchange of payment transactions between banks. 

In June 2021, the Swiss National Bank required financial institutions to accept instant payment transactions beginning August 2024. From August 2024, the major Swiss banks must support instant payments. Smaller banks have until the end of 2026 to comply. This obligation includes only the issuance of instant payments, not the reception. 

The SIC5 platform operates in real-time and is integral to maintaining the liquidity and stability of the Swiss financial system. SIC5 supports various types of transactions including high-value and time-critical payments, with a target value transaction time of 10 seconds. SIC5 complies with international standards such as ISO 20022, which enhances its interoperability with other global payment systems.

Even after transitioning to the SIC5 platform and introducing instant payments, Swiss banks will continue to offer regular bank transfers, with instant payments as an additional service.

In November 2025, SIX will align with Swift CBPR+ to facilitate cross-border payments and reporting. As the name suggests, this part of the ISO 20022 XML version 2019 standard describes the new format of payment messages being used within the SWIFT network.