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Last month, the Swiss unveiled a new smart bank note in their portfolios. The purple 1,000 franc note was the latest in the series of the Swiss National Bank (SNB) to be revamped. The new note is slightly smaller and shows two people shaking hands over a globe; the theme is the flair of communication, according to the SNB.
And it's not a regular note, it's one of the most valuable notes in the world, worth around 880 euros (1,007 USD). According to the latest figures published by the National Bank, more than 48 million of them are in circulation, which represents about 60% of the value of all banknotes in Switzerland.
But this reorganization comes as other countries are phasing out their high-value notes and the use of cash is decreasing in European countries, albeit at very different rates.
Bring your wallet
Fritz Zurbruegg, vice-president of the SNB, described the new bank note as a "cultural phenomenon" and said the 1,000-franc note "corresponds to what people want". He was popular for high value purchases and paying bills at the post office, in addition to being "a valuable store," he added.
In Switzerland, cash payment remains the dominant method of payment. Here, we badume that everyone has money, even in an increasingly digital economy. Most do not get caught buying a sandwich or paying for a haircut when the card payment machine is down.
If you have to pay a coffee with a 100 franc bill, no need to apologize, no one will ask you if you have something smaller. And for large purchases, some banks even allow you to withdraw up to 5000 francs per day (or 10,000 per month) from the vending machine without notice. Buying a car costing tens of thousands of dollars in cash is also not unusual.
A survey conducted by the SNB in 2017 on the payment behavior of 2,000 Swiss participants revealed that they carried out 70% of their transactions in cash. Debit cards accounted for an additional 22%, followed by 5% credit cards. Innovative methods such as payment applications and contactless card payments have been much more modest.
Yet, a report published in 2018 by the Bank for International Settlements (BIS) indicates that, worldwide, many payments traditionally made in cash go into electronic format. While neighbors like Germany seem to share Switzerland's affinity for cash, other European countries such as Sweden and the Netherlands are moving away from it much more quickly.
& # 39; Real money & # 39;
Why then do the Swiss prefer to pay cash? Two simple reasons are that money is generally considered part of their culture and people think that its use allows them to track their expenses more easily. In Basel, 53-year-old Chris Troiani confirmed this claim by saying that many people she knows still prefer to be rebadured by wearing big banknotes in their wallets.
Philippe Chappuis, 44, favors payment by card or using a mobile payment application, but for practical reasons. "I do not like my wallet stuffed with coins," he says. However, he can understand why people like cash, saying that the SNB's use of negative interest rates has created uncertainty about the banks' possible response and raised concerns about the existence of 'a virtual existence. Money is more tangible, he says to himself, "You can be sure to own it."
Jürgen Engler, like other traders on Basel's Marketplatz, only accepts cash. "Two or three customers a month ask to pay with a card," he says. "When I go to the store, I like to pay with a card, but when I go to the market or restaurant, I always pay with real money."
Yet despite the growing popularity of cash, the use of mobile payment applications such as TWINT or V Pay is starting to develop. Research conducted in 2017 concluded that the proportion of Swiss consumers using mobile payment on an occasional basis would increase.
Jane Kettner, 29, is part of the new generation who is adopting these new payment methods, but she still finds that cash payment allows her to better control her spending. "When it's electronic, you're more likely to spend money," she says.
This is a point repeated by Miguel Brendl, psychologist and professor of marketing at the University of Basel. "Profane wisdom suggests that spending a virtual franc may give the impression that you spend less than when you spend a physical franc, but even if that is true, and it may be true, that is not enough to explain why a society would prefer cash, he says.
There is also the factor of identity: the Swiss identify with money partly because of the way they see themselves. It is a nation that values privacy and does not like to be told what to do. They see themselves as different from their European neighbors and closely protect the traditions that distinguish them, such as languages, the political system and the currency.
They see themselves as different from their European neighbors and keep a close eye on the traditions that distinguish them
Neighbors point out that high-value notes help criminals to launder money: 17 of the 19 central banks in the euro area have decided not to produce 500 euro banknotes to fight crime. The German Bundesbank and the Austrian National Bank will soon do the same.
High-value notes also facilitate the withdrawal of large sums of bank accounts, especially towards the end of the year, when Swiss citizens have to declare their wealth on their bank statements. Fritz Zurbruegg rejected the idea that criminals used the 1,000 franc bill more often than others, but admitted that even if buyers' request to increase their cash flow at Christmas, it could also be attributed to fact that "studies have also revealed other factors, such as possible tax evasion".
"Confidentiality, convenience"
Patrick Comboeuf of the Institute of Digital Affairs of the HWZ Zurich University of Applied Sciences and member of the Fintechrockers Board of Directors, a think-tank created by a diverse group of activists, believes that Switzerland it will distance the cash.
"The biggest lever for more efficient adoption of cashless payments is a first rate user experience. Unfortunately, it is one of the most neglected concepts in Switzerland today, "he said. But he thinks that the digital age is shifting its power from the financial services sector to consumers, leading to a greater focus on customer service.
Cryptocurrency and blockchain technologies are still topical for Swiss start-ups and well-established companies. A recent study from the University of Lucerne revealed that the growth of fintech in Switzerland has been significantly accelerated in 2018, both in terms of the number of companies that venture capital invested.
Jonathan Rea, CEO of Foinder, a Swiss-based business consulting firm, believes that the mbadive adoption of a cryptocurrency replacing daily transactions will be done in at least a decade. "For mbad adoption to take place, it depends on the trade-off between privacy, convenience, self-identity and the perceived value of money as a protection against corruption." debt, "he says.
For the moment, many Swiss still attach importance to the anonymity and freedom that money offers them. New notes are making their way into the world. In simple terms, they are beauty objects. That's if you can keep them long enough in your wallet.
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