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?
`“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.
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.
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.