The article explores the ongoing debate in Switzerland regarding cash versus card payments. Sianka Zürcher advocates for cash due to its tangibility and superior budget control, dividing her household finances into envelopes. Meanwhile, Josua Menzi, representing local businesses, highlights the efficiency and lower costs associated with card payments. Despite the growing trend towards digital payments, a significant portion of the population remains attached to cash, valuing its privacy and reliability, as evidenced by recent surveys and proposed political initiatives to preserve cash.
“I prefer to have cash in hand; it’s tangible and offers me a clearer picture of my finances,” shares Sianka Zürcher, a 32-year-old resident of Toggenburg. “I’m firmly on the cash side,” she adds.
Zürcher meticulously organizes her household budget into 22 different envelopes, ranging from donations to everyday purchases and recreation. By annotating her income and expenses directly on the envelopes, she maintains an accurate balance for each category, eliminating the need for complex reconciliations.
The Advantages of Cash Payments
Much like Sianka, many individuals in Switzerland are still committed to using cash. Several key benefits of cash are often highlighted:
- It’s user-friendly, particularly for those who find digital transactions challenging.
- It enhances budget management, as illustrated by Zürcher’s approach.
- Cash transactions ensure privacy and data confidentiality.
- Importantly, cash transactions are reliable, functioning without the need for electricity or internet connectivity.
Additionally, cash is considered central bank money, providing a level of security that private bank deposits do not. For many, this is a crucial factor during times of financial uncertainty.
Benefits of Card Payments
The Menzi family operates three bakeries in Wattwill, each featuring a café and employing around 40 staff members. They lean towards the advantages of card payments. “If someone doesn’t have cash, they can still pay with a card,” reads a sign at their shop. Deputy manager Josua Menzi notes that while both payment methods are accepted, he personally favors card transactions.
Although digital payment systems incur fees, Menzi explains that these systems minimize calculation mistakes, streamline the checkout process, and reduce the labor involved. “We dedicate about four hours a week just to counting and managing cash,” he states. He also remarks that using a card simplifies larger transactions compared to handling cash, potentially boosting sales.
The Hidden Costs of Cash
Menzi highlights a frequently overlooked issue: the time committed to cash management. While cash doesn’t directly incur fees like digital platforms such as Twint, there are associated labor costs.
A recent study titled “The Cost of Point of Sale Payments in Switzerland” from the University of St. Gallen reveals that cash handling could incur costs up to five billion francs, while the costs for card transactions amount to about one billion each.
“Cash involves significant fixed costs,” explains study director Tobias Trütsch, pointing to staffing costs for counters, ATM operations, and the expensive logistics associated with cash transport and distribution. For example, setting up an ATM can cost as much as CHF 90,000, with ongoing operational costs reaching CHF 40,000 annually, plus indirect costs related to cash management tasks.
Digital Payments on the Rise
When comparing cash to card payments, each method offers its own set of pros and cons. However, the trend indicates declining cash use for daily transactions. The “Swiss Payment Monitor,” regularly conducted by the HSG and Zurich University of Applied Sciences, offers insights into these shifts, with the latest survey conducted in May 2024.
The latest findings show debit cards leading in face-to-face transactions at over 30%, closely followed by cash at just under 30%. Credit cards occupy the third position. Many respondents cite convenience and speed as reasons for preferring card payments over cash.
Cash for Smaller Transactions
While cash transactions are diminishing, they are increasingly reserved for smaller purchases, typically under 20 francs. Although mobile payments via smartphones or smartwatches are gaining traction, they still lag behind cash and card payments in overall turnover.
A Growing Debate
The differing opinions of consumer Sianka Zürcher and baker Josua Menzi encapsulate the ongoing discussion about cash versus card payments in Switzerland. Many appreciate the convenience and speed of card transactions, even as they acknowledge the loss of anonymity. Retailers emphasize the efficiency of digital payments, while consumers often argue for the tangible benefits of cash, including its perception of security and privacy.
Despite the declining popularity of cash in shopping, a strong sentiment for maintaining physical currency persists. The “Swiss Payment Monitor” indicates that nearly two-thirds of respondents oppose eliminating cash in Switzerland, with many businesses expressing similar views. A recent survey by the National Bank also highlighted that a large majority of companies consider physical cash essential.
This debate is spilling over into the political arena, with the proposed initiative “Yes to an independent