Twin and Co. still on the rise – cash is becoming less important

Cash has continued to lose importance, but remains the most popular means of payment in Switzerland. While the use of debit and credit cards has remained stable, payment apps have become increasingly important.

This has emerged from a study by the Swiss National Bank (SNB) into the payment behavior of the Swiss, which was released Thursday. The survey was conducted last fall for the third time after 2017 and 2020.

Specifically, 36 percent of the 2,000 people surveyed use cash for everyday payments. In 2020, the share of transactions that were settled with cash was still 43 percent and in 2017 as much as 70 percent. The SNB wrote that the decline in cash use has slowed down considerably.

Meanwhile, debit and credit card usage shares (33 percent and 13 percent, respectively) remained very stable. These cards would be used in almost every other day to day transaction. The contactless function (75 percent) is the most used.

Payment apps are increasingly used by the population and have significantly increased their transaction share to 11 percent. In 2020, mobile phones were only used for 5 percent of daily payments in Switzerland. The payment apps would replace both cash and giro payment methods, writes the SNB.

Distribution of paid apps is increasing

At the same time, more and more Swiss people have a payment app: 68 percent of the population has it installed on their mobile phone. That is more than 20 percentage points more than in the last survey two years earlier.

Notes and coins are still the most common, with 96 percent of those surveyed stating that they keep cash in their wallets or at home for everyday expenses. 93 percent of the respondents have a debit card (2020: 92 percent) and 76 percent have a credit card (2020: 78 percent).

However, the larger amounts are mainly settled with plastic cards. Measured by the transaction value of everyday payments, the debit card remained the most important means of payment at 33 percent. The value of cash has weakened to 20 percent. This was 24 percent in the previous survey.

The biggest change is in paid apps, where the value share has doubled to 8 percent. The SNB wrote that the value increase and transaction shares show that payment apps are widely used by the population, regardless of the payment amount.

Slowing down the decline in the importance of cash

The shift from cash to non-cash means of payment is therefore continuing, but at a slower pace than in previous years. The majority of those questioned assume that this development will continue in the coming years.

Payment apps in particular will probably play an even more important role for the population in the future. When asked which means of payment will be used more often in the future, payment apps (48 percent) are mentioned more often than debit cards (35 percent) for the first time.

Little has changed in the past two years when it comes to regular payments. Measured by the value of the transactions, 52 percent of all regular accounts are settled via internet banking. The standing order (14 percent) and the electronic invoice eBill (10 percent) follow far behind.

Technical failures rarely lead to non-payment. Although about half of those surveyed experienced a technical glitch, only 7 percent of people were prevented from making payments. Much the same applies to acceptance restrictions.

Satisfaction with cash acceptance

Despite increasing restrictions in certain areas, the population in Switzerland is happy to accept cash. A quarter of the population has experienced at least one situation where cash was not accepted or wanted for a payment, it said.

These situations mainly occurred in the hospitality industry (32 percent) or at events such as fairs, festivals or concerts (24 percent). “Despite this increase, almost the entire population is basically satisfied with the acceptance of cash in Switzerland,” the National Bank wrote. A clear majority of the population wants to continue using cash as a means of payment in the future.

Which payment apps are the most popular?

By far the dominant payment app is Twint, SNB Vice President Martin Schlegel told media in Zurich. With 78 percent, Twint is slightly more widespread than three years ago (77 percent). Other apps such as Apple Pay or Google Pay achieve significantly lower shares.

Payment apps are most commonly used for transfers to private individuals (90 percent). For example, after a joint visit to a restaurant, the share is transferred to the person who has paid the entire bill. The apps mostly replace the cash that used to be common.

58 percent use the payment apps for online purchases, mainly at the expense of credit cards. And half of the respondents use payment apps at the checkout, where they are mainly used instead of cash and debit cards.

Other applications include parking machines, farm shops, flower fields and machines that had to be fed with coins and banknotes before the arrival of payment apps.

What about Bitcoin and Co.?

For the first time, the SNB also asked the population about the use of cryptocurrencies such as bitcoin and stablecoins. Overall, however, less than 6 percent reported owning or using such digital currencies for payment purposes. Significantly more men than women use cryptocurrencies, the study found.

Sources

(aeg/sda/awp)