Instant Payments: Real-Time Bank Transfers Explained

What are instant payments?

Instant Payments are money transfers which arrive in the receiving account within seconds of being sent. For that reason, instant payments are also referred to as real-time payments. Bank customers can use instant payments to make transfers on any day of the week, at any time. However, in order for this to work, both the sender’s bank and the recipient’s bank have to provide the instant payment service.

The Swiss National Bank (SNB) is convinced that instant payments will become the new standard for electronic transactions.

How are instant payments different from regular bank transfers?

With normal bank transfers, it can take several days before the transferred money arrives in the recipient’s account. That is because up until now, transfer orders have typically been recorded in a digital log which is only processed on the following night.

Before November 2023, transfers between Swiss banks could only be processed between 19:00 and 17:00 on weekdays, but not on Saturdays, Sundays, or bank holidays. The big advantage of instant payments over standard bank transfers is that you can transfer money instantly, at any time of day or week.

The SIC5 system, which came into service in November 17, 2023, makes it possible for Swiss banks to complete transfers between each other around the clock, including on weekends and holidays. SIC5 is necessary in order for Swiss banks to offer instant payment transfers to other Swiss banks in the future.  

International bank transfers take longer than local transfers. The reason for this is that the transfer generally has to pass through at least one correspondent bank before it gets from your bank to the recipient’s bank. Depending on which country you transfer money to, it can take several days to several weeks for it to get there. With instant payments, the transfer is completed within just a few seconds. But here too, both your Swiss bank and the foreign bank have to support instant payments for it to work.

When could using instant payments be beneficial?

There are many situations in which instant payments are beneficial. Here are a few examples:

• Online shopping: Instant payments provide a quick and simple way to pay for online shopping. The store receives the money immediately, and can provide the goods or services without any delay. You do not need a debit card or credit card to pay online, and merchants don’t have to pay the high fees for accepting card payments.
• Sending money to other countries: Instant payments provide a good alternative to regular international bank transfers because the money is transferred instantly.
• Paying workers and service providers: If you need to pay a craftsman or service provider immediately directly, you can use instant payments to make the payment instantly with your phone. The worker does not need a POS terminal to collect cashless payments.
• Emergencies: If a friend or family member ends up in a situation where they desperately need money, you can use instant payments to send them financial help immediately. They receive the money right away, even if it is the weekend or the middle of the night.

With Twint, Swiss banks have offered a mobile payments service which lets users transfer money to third parties within seconds for many years now. But real-time transfers only work if the sender and recipient both use the prepaid version of Twint. If one of the parties uses a version of Twint which is linked to a bank account, then it often takes much longer for the money to arrive in the recipient’s account.

Residents of Switzerland who use the UK-based Revolut and Wise neobanks have already been able send and receive money by instant payment for some time. Wise places a strong emphasis on instant payments, with more than half of the transfers processed by this international money transfer service being made using instant payments.

Which Swiss banks offer instant payments?

From August 20, 2024, Swiss banks will have to be able to receive instant payments from other Swiss banks. Smaller banks which process less than 500,000 transfers per year have until the end of 2026 to get set up.

These banks let you send money using instant payment. Note: This is not a complete list.

• Berner Kantonalbank
• Hypothekarbank Lenzburg
• Raiffeisen
• St. Galler Kantonalbank

But Swiss banks are not obligated to offer outgoing instant payments.

These banks plan to introduce instant payment services in the near future:

• Bank BSU: Targeted launch in 2026
• Bank Cler
• Basellandschaftliche Kantonalbank
• Basler Kantonalbank
• LLB: To be introduced in the first semester of 2025.
• Luzerner Kantonalbank: Introduction in 2025, at the earliest.
• Migros Bank
• Postfinance
• Swissquote: Targeted introduction in 2025
• Thurgauer Kantonalbank
• Valiant: Introduction in 2025
• Zak
• Zürcher Kantonalbank

Even after the introduction of instant payments, Swiss banks will continue to offer regular bank transfers. Instant payments will be offered as an additional service.

Currently, there are no Swiss banks which offer the SEPA Instant Credit Transfer service (as of January 2024). But it is likely that some Swiss banks will offer this service for fast transfers to countries in the SEPA zone.

Do neobanks offer instant payments?

Some neobanks already offer their customers instant payments. Revolut and Wise are two examples. International transfers made using Swiss neobank Neon are often credited to the foreign account within 10 minutes. Transfers between Neon accounts are also completed immediately.

Does Twint support instant payments?

Twint already includes some instant payment features, such as send other users requests for money. Fast money transfers are also possible with Twint, but transfers are not actually processed in real-time in the background. That is why it can take some time for the money to show up in your account.

What do instant payments cost?

All of the banks that responded to moneyland.ch's inquiry do not charge their customers fees for receiving incoming instant payment bank transfers.

• Bank BSU
• Bank Cler
• Basellandschaftliche Kantonalbank
• Basler Kantonalbank
• Berner Kantonalbank
• Hypothekarbank Lenzburg
• LLB
• Luzerner Kantonalbank
• Migros Bank
• Neon
• Postfinance
• Raiffeisen *
• St.Galler Kantonalbank
• Swissquote
• Thurgauer Kantonalbank
• Valiant
• Zak
• Zürcher Kantonalbank

* Raiffeisen Switzerland's recommendation to Swiss Raiffeisen banks. Fees can vary between individual Raiffeisen banks.

Some banks charge business customers a fee for incoming transfers. Depending on the bank, these can apply to instant payment transfers as well.

Only a few banks will offer outgoing instant payment transfers from August 20, 2024. Those that do either do not charge customers fees for this service, or charge a fee of two francs per transfer. 

Table 1: Fees for outgoing instant payment transfers

* Raiffeisen Switzerland's recommendation to Swiss Raiffeisen banks. Fees can vary between individual Raiffeisen banks.

Some banks have not communicated their fees (as per July 11, 2024). These include the Aargauische Kantonalbank, BPS, Coop Finance Plus, Credit Agricole Next Bank, the Graubündner Kantonalbank, Radicant, and UBS.

Are instant payments already available in Europe?

Since November, 2017, instant payments have been available in many European countries via the SEPA Instant Credit Transfer service. The guidelines for this service stipulate that transfers should be processed within 10 seconds. A longer 20 second processing time is allowable in exceptional cases. These time limits apply to both local transaction within the same country, and international transfers to other SEPA member countries.

Not all banks offer instant payments. Bank customers can only make instant transfers if both their bank and the recipient’s bank provide this service.

In which countries are instant payments widely used?

Instant payments are already very popular in many Asian countries. In India, more than 50 billion instant payment transfers were made in 2021. It is followed by China, Thailand, Brazil, South Korea, and Nigeria. In Europe, instant payments are most popular in the United Kingdom, which takes seventh place globally with 3 billion instant payments made in 2021.

Are instant payments an alternative to card payments?

Instant payments services are viewed as competition for card payments. Merchants pay high fees when customers use cards to pay for purchases. The fees charged for instant payments may well be much lower. Instant payments are a bank transfer service. In the past, this kind of service has always been cheaper than card payments. For online shopping, instant payments could become an affordable alternative to accepting debit cards and credit cards.

How secure are instant payments?

Instant payments are considered to be just as secure as conventional bank transfers. Instant payment services are part of regular online banking or mobile banking services. The instant payments which are offered in Switzerland will be processed by the exact same clearing system that processes standard bank transfers, when the transfer is between two Swiss banks.

What happens if I make a mistake in an instant payment transfer order?

Because transfers are performed instantly, it can be more difficult to recover your money from your bank. But as with regular transfers, your bank can help you, in some cases.

Swiss law is clear that a person who receives money due to an error is required to return it.

What are the advantages of instant payments?

Instant payments offer many advantages:

• Transfers are completed in a matter of seconds. The money become available in your account instantly.
• You can send and receive money 365 days per year, 24 hours per day.
• The recipient gets the money immediately. In the case of purchases, this means orders can be filled immediately.
• New features like Request to Pay – by which a person or merchant can send a request for payment – can be included in the service.
• Much lower fees for merchants, compared to card payments.

What are the disadvantages of instant payments?

• Because transfers are executed within seconds, correcting errors can be more difficult.
• Depending on the bank, instant payments can be more expensive than standard bank transfers.
• Currently, only a few banks offer outgoing instant payment transfers.
• Both the sender's and the recipient's banks must support instant payment.

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