More and more stores accept payment apps such as Twint, but cash is not disappearing

Payment apps are becoming increasingly popular not only among private individuals, but also among companies: 59 percent of companies now accept payments via an app in their business premises. But cash is still king.

This is evident from a survey by the Swiss National Bank (SNB) among approximately 1,750 companies in Switzerland at the beginning of the summer of 2023, which was published on Friday. When first surveyed in 2021, only 40 percent of companies had accepted payment apps.

This means that payment apps have surpassed credit cards (53 percent) and debit cards (48 percent) after being on par in 2021. In sectors such as catering or retail, where private individuals most often pay on site, the acceptance of payment apps is even higher than elsewhere.

In the hospitality industry, 78 percent of companies can pay with the mobile phone app, and in retail 73 percent.

Twins at the top

The main payment app is Twint. The market shares of Apple Pay, Google Pay or Samsung Pay are difficult to estimate, SNB specialists told the media in Zurich. For example, Apple Pay stores a debit or credit card. This makes it impossible to distinguish whether the payment was made via a mobile phone app or directly via a plastic card.

The increase in the acceptance of mobile payments does not come as a surprise: the 2022 payment survey among private individuals already showed that payment apps are increasingly used by the population. “It can be assumed that the increased use has had a positive effect on its acceptance. This shows that the acceptance and use of payment methods can influence each other,” the SNB wrote.

Acceptance for bank transfers also increased, while acceptance for payments by invoice fell slightly. A possible reason for this could be that companies are less willing to provide their customers with a ‘short-term loan’ through purchase on account due to the corona pandemic or the sharp increase in energy prices in recent years, the SNB writes.

SNB: Cash never disappears

Cash is holding up relatively well; at 92 percent it is the most accepted payment method for companies that do face-to-face business. This means that the importance of cash has hardly diminished, says SNB deputy head Martin Schlegel. When first surveyed in 2021, 94 percent of convenience stores still accepted cash.

It was said that the most important decision-making criterion for companies was the needs of their customers. Reliability comes second. A large majority of the population wants to continue paying in cash, says Schlegel: “We think cash will never disappear.”

We keep hearing that fewer and fewer stores accept cash, says Schlegel: “We cannot confirm this subjective impression from the previous study.”

Overall, only a few companies plan to change their cash acceptance. About 7 percent of all companies with face-to-face business say they plan to limit cash acceptance over the next two years. On the other hand, 6 percent of companies plan to expand cash acceptance.

Negative spiral possible

However, much depends on the monetary infrastructure. A dismantling of ATMs, bank branches and post offices would worsen the money supply for most businesses. A quarter of companies would then reduce their use of cash.

This could cause a negative spiral. Because lower acceptance reduces the use of cash among private customers, which decreases acceptance among companies. “If the spiral were to start, we would take measures,” Schlegel said, without giving concrete details.

Last October, the National Bank and the Federal Financial Administration organized a roundtable discussion with other players in the cash supply, such as banks and retailers, to explore measures. A group of experts are now tasked with determining the challenges of accessing cash. “We will look for solutions,” the SNB experts assured.

(sda/awp)