Research - 24.02.2022 - 00:00 

How does Switzerland pay?

About half of the online payments are now being transacted through smartphone, tablet and co. In addition, approx. 30 per cent of Swiss people use neobanks. This is revealed by the latest Swiss Payment Monitor, a study conducted by the ZHAW and the HSG.

24 February 2022. Nowadays, Swiss people very frequently use mobile devices to pay for goods and services which they do not directly purchase on site: 49 per cent of all transactions in so-called distance selling are made through a mobile telephone, a tablet or a smartwatch.

On the one hand, this concerns payments made directly through a bank account, for instance with TWINT; on the other hand, it also covers payments through an app with a deposited credit card number such as Apple Pay or SBB Mobile.

This is revealed by the Swiss Payment Monitor, which has been conducted for the sixth time by the ZHAW’s School of Management and Law and the University of St.Gallen (HSG). A representative sample of 1,460 people from all over Switzerland were interviewed for the survey in late 2021.

Many in-app purchases

A year ago, the proportion of mobile payments was still 29 per cent of all distance purchases. “This rapid growth is predominantly a consequence of payments in apps with an integrated payment function, such as SBB Mobile. By now, these account for more than half the number of mobile distance purchases,” explains ZHAW means of payment expert Marcel Stadelmann. The second most frequent distance payment is by invoice (26 per cent), followed by the non-mobile use of credit cards (10 per cent). In terms of the overall turnover of all distance purchases, too, mobile payments almost doubled last year: by now, their proportion accounts for about a quarter. Thus mobile payment solutions constitute the runner-up behind invoices (45 per cent), and ahead of the non-mobile use of credit cards (17 per cent).

All in all, debit cards remain in the lead

With a proportion of 32 per cent of the number of all transactions (of distance and presence selling), as well as 30 per cent of the corresponding turnover, debit cards are still the most frequently used means of payment overall. With a proportion of 16 per cent, cash lost some share in the turnover (-2.8 percentage points) and came third behind the non-mobile use of credit cards (23 per cent). With regard to frequency of use, however, cash retained second place behind the debit card with 30 per cent of all transactions. Third place was occupied by the non-mobile use of credit cards with 16 per cent. “After the rapid changes at the onset of the pandemic, the Swiss population’s payment behaviour levelled off in the course of 2021,” explains Marcel Stadelmann. “Only the popularity of mobile payments is continuing to grow distinctively, with TWINT at a rate of 60 per cent of both the turnover and the number of mobile payments being the most used mobile payment solution in Switzerland by far.”

Neobanks as a complement

Approx. 30 per cent of people in Switzerland have made use of new online solutions provided by neobanks at least once. “Statistically speaking, it is particularly younger men with a high level of education who use neobanks more frequently,” says Tobias Trütsch, payment economist at the University of St.Gallen. Revolut is used most often (12 per cent), followed by Swiss providers Neon (9 per cent) and Zak (8 per cent). The vast majority of neobank users avail themselves of their services as a complement to the services offered by conventional providers of financial services. 2.5 per cent of all the interviewees regularly transact payments through neobanks, whereas merely 1.4 per cent hold the lion’s share of their money in an account with a neobank.

E-franc hardly known at all

Furthermore, one in ten interviewees indicated that they knew and used virtual and cryptocurrencies. This proportion has increased by about 4 percentage points within a year. What is still little known in Switzerland is digital central bank money. “Although about 14 per cent of the interviewees said that they knew this term, only about 5 per cent were also able to describe it correctly,” explains Tobias Trütsch. The term digital central bank money denotes a new form of electronic money that is issued by central banks and is based on blockchain technology. Solutions along these lines are being debated at an international level, in Switzerland also under the name of “e-francs”.

About the Swiss Payment Monitor

The Swiss Payment Research Center (SPRC) of the ZHAW School of Management and Law and the Swiss Payment Behaviour Lab of the University of St.Gallen have been dealing with questions concerning payment independently of each other for years. They have jointly produced the Swiss Payment Monitor since 2018 on an annual basis and have produced it twice a year from 2021. When it was first published, it was the first annual Swiss payment study to combine the consumers’ perspective with a macroeconomic view.

Thanks to the combination of online interviews and a diary survey linked up with public data from the Swiss National Bank (SNB), the daily use of means of payment can be mapped realistically. All in all, more than 1,460 people aged between 18 and 87 from all three linguistic regions of Switzerland were interviewed in a representative survey from late October to mid-November 2021. The study is funded by the two research institutions, the industrial association of all big Swiss issuers of credit cards of the international card organisations (Swiss Payment Association), as well as the industrial partners Nets and Worldline.

Image: Unsplash / Jonas Leupe

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