Could Covid end the Swiss love affair with cash?

During the pandemic, many businesses in Switzerland switched to being ‘card only’. Could this be the mark of something permanent?

Could Covid end the Swiss love affair with cash?
Do you recognise this colourful paper? Photo by Claudio Schwarz on Unsplash

`“You don’t know where it’s been” is the common refrain from parents everywhere to scare their kids out of putting coins in their mouths. But up until recently, most of us would ignore the same advice when it came to cash. 

When paying with card, it would come down more to a question of convenience than fears about infection. 

Across Switzerland, for a temporary period at least, the coronavirus has changed this – with card payment preferred in many stores and sometimes being the only option. 

Cash banned in some stores, discouraged in others

While Switzerland has a strong and enduring love for cash, as reported in the Swiss news outlet Le Temps, hygiene concerns relating to the coronavirus could permanently change this.

The World Health Organisation (WHO) has expressly said card payments – particularly contactless card payments – should be encouraged as a means of halting the spread of the virus. 

Swiss smartphone payment system Twint saw a 50 percent increase in use since the early days of the pandemic. 

Twint, which is used to make payments as well as to transfer money electronically between members of the public, saw more and more businesses accept it as the pandemic went on.

A 2017 study showed that 70 percent of transactions in Switzerland are carried out in cash, whereas one completed in 2020 found that this was just 43 percent

The share of payments with debit cards rose from 22 to 33 percent over this time. 

Swiss daily 20 Minutes reported that several shops in the capital of Bern have asked customers to “pay with card for health reasons”, while the Zurich association for small-to-medium enterprises has said its members have seen significant increases in popularity of card payments. 

Authorities in China took the drastic step of disinfecting cash in order to halt the spread of the virus. 

Contactless payment is growing in popularity in Switzerland. Image: DPA

Cash still king in Switzerland

The use of cash in Switzerland is still widespread, particularly with regard to other similar countries, although the love is not universal. 

A 2020 study found that people in the Italian-speaking canton of Ticino are particularly fond of cash, while those over 55 are also far more likely to use cash than the younger generations. 

There is also a difference in the use of cash on the basis of income, with those on lower or middle incomes more likely to use cash than those with a higher income level. 

The Swiss also love the country’s higher denomination bills. In total, 40 percent of those in the 2017 survey indicated they had at least one CHF1000 note (944€) – and two-thirds had at least one CHF200 (189€) note. 

The study also found that a Swiss person is likely to have an average of CHF133 (125€) in their wallet at any time. 

Jonathan Rea, CEO of Foinder, a Swiss-based business consultancy, told the BBC that Switzerland’s preference for cash comes from privacy concerns, with many customers preferring the anonymity of cash. 

The lack of demand for card payments can also be self-perpetuating, as fewer businesses are incentivised to put in place card payment systems – or adopt newer payment methods like payment apps. 

This stands in opposition with smaller European countries, particularly smaller countries with unique currencies like those in Scandinavia, who have made a significant shift to electronic payments. 

Cash is dead. Long live the king?

The enduring popularity of cash in Switzerland is odd when looking at many of the other characteristics of the country. 

Switzerland certainly has no aversion to technology and the country’s unique currency means using cash can be less accessible for tourists or travellers. 

At this stage, it is difficult to determine whether the switch away from cash is purely temporary – or whether it will be permanent. 

Professor at the IFZ Institute of the Lucerne University of Applied Sciences, Andreas Dietrich, told Le Temps that even if the current crisis may not mean the immediate end of cash in Switzerland, it could make a marked difference to the use of cash in five years time. 

“The current crisis could significantly change consumer behaviour. Already because they are forced to – you don’t change ‘just like that’- and they could realise how practical and quick it is.”

If a group of cash fans have their way however, the Swiss use of cash might be set in stone. 

In August 2021, a referendum was launched by the Swiss Freedom Movement, a group best known for its conspiracy theory and Covid vaccine sceptic activism. 

The referendum has been launched as a consequence of the Covid pandemic, which has seen a significant shift towards card and device payment rather than the colourful notes of the Swiss franc. 

It demands that cash be always available in sufficient quantity and not be replaced by credit and debit cards.

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Reader question: Can I put my Swiss health insurance on hold if I’m abroad?

Given how expensive health insurance premiums are in Switzerland, you may be tempted to suspend your policy while you are abroad. Is this possible?

Reader question: Can I put my Swiss health insurance on hold if I'm abroad?

Unlike the obligatory car insurance, which you can suspend temporarily by depositing your registration plates at the local motor vehicles office, rules pertaining to health insurance are much stricter.

As the Federal Office of Public Health explains it, “If you leave the country for a certain period to travel or study but do not take up residence abroad, you are still required to have [health] insurance in Switzerland”.

In other words, as long as you are a registered resident of Switzerland, regardless of your nationality or passport, you must keep your compulsory Swiss health insurance and pay your premiums. While you do this, you also remain covered against most medical emergencies while you travel.

However, rules are less stringent for supplemental health plans which can, in some cases, be put on hold, depending on the insurance provider, according to Switzerland’s Moneyland consumer website.

The only exception allowed for suspending the health insurance coverage is during a military or civil protection service which lasts more than 60 consecutive days.

“During these periods, the risks of illness and accident are covered by military insurance. Your health insurance provider will refund your premiums”, according to FOPH.

Under what circumstances can you cancel your Swiss health insurance?

Swiss law says you can cancel your insurance if you are moving abroad, either permanently for for a period exceeding three months.

If you do so, only claims for treatments given while you still lived in Switzerland will be paid by your insurance; any medical bills for treatment incurred after you officially leave will be denied.

These are the procedures for cancelling your compulsory health insurance if you leave the country under conditions mentioned above

To announce your departure abroad, you must send your insurance carrier a letter including your name, customer number or AVS/AHV number.

You must also include a certificate from your place of residence in Switzerland confirming that you have de-registered from your current address, as well as the date of your departure.

Note, however, that if your new destination is another Swiss community / canton, rather than a foreign country, your insurance can only be cancelled from the following calendar year and only if you present proof of having taken up a new policy with another company.

READ MORE: EXPLAINED: How to register your address in Switzerland

You can find out more information about this process here

If you suspend your health insurance for less than six years, you can reactivate it at a later date with the same company when you return to Switzerland.

READ MORE : What you should know about your Swiss health insurance before you go abroad