Hold your mobile phone or payment card up to the reader and you’ve paid for lunch. Our online purchases, too, are made without cash. Surveys carried out by the SNB show a trend to cashless payments. Nevertheless, the SNB’s current survey indicates that a large majority (95%) in Switzerland wish to continue to be able to pay with cash. On average, Swiss residents carry CHF 130 in their wallets. Cash remains one of the most commonly used methods for day-to-day payments.

But the supply of cash is under pressure. To provide people with access to it, the banks and Swiss Post operate a network of ATMs and branch offices, all of which incur costs. These costs remain at virtually the same level despite a decline in the use of cash. Savings are possible by reducing the number of branches and ATMs. But if it becomes more difficult to obtain cash, people might change their payment habits and use less of it. At the same time, the acceptance of cash at points of sale might also decline.

This brings us back to the payment method surveys and the needs of the general public. If the large majority want to continue to be able to pay with cash in future, as the survey indicates, then they need to use it in their everyday transactions. For only what is used today will also be available tomorrow.

The advantages of cash

Cash has some special characteristics not shared with payment cards and mobile payment apps:

• Its use requires no auxiliary aids: Payment can be made anytime, anywhere. If a card terminal is not working, if there is no mobile reception or in the event of a power outage, cash is still a dependable means of payment.

• Protection of privacy: Unlike digital bank transactions, cash leaves no traces that can be followed or analysed by third parties. Cash makes it easier to protect and control personal financial data.

• An inclusive payment method: Cash allows all sectors of the population to participate in economic life. For example, cash can also be used by people who do not have a bank account. And children can learn important lessons about how to handle money by making their own little purchases using cash. The elderly, as well as anyone with limited knowledge of digital payment methods, can use cash to make their daily payments without assistance.

• Storing value: Cash can be used to store value without recourse to banks and financial institutions.

How the SNB puts cash into circulation

Supplying money is a cyclical process. The SNB provides the banks, Swiss Post and cash processing operators with the cash they require. In the process, it puts both new and used banknotes and coins into circulation. Local distribution to the population is performed mainly via ATMs.

When it is used as payment in shops, cash changes hands and makes its way to businesses. These businesses then either deposit the cash themselves at the banks or Swiss Post, or, in the case of larger amounts, commission specialist companies who collect and process the cash, before transferring its value back to the businesses. In a later phase, this cash is then returned to the SNB for processing, where it is once again counted and authenticated. At the same time, old, damaged and soiled banknotes and coins are separated out. The circle then begins anew with the issuance of cash when the SNB receives its next orders from the banks or Swiss Post.

The future of cash

There is much to suggest that the use of cash as a payment method will continue to decline in Switzerland, and that cashless methods of payment will be used more and more frequently. Mobile payment apps will probably gain in importance. But it seems unlikely that cash will be completely replaced and that Switzerland will become a cashless society. Its advantages speak for its continuing use as a payment method and as a store of value. In the end, it is the people themselves who will decide, with their use of cash, what role it will play in future.