Swiss National Bank (SNB) Payment transactions (overview)

Payment transactions (overview)

Overview

In Switzerland, payment transactions are handled primarily by the National Bank, the commercial banks and PostFinance. The National Bank supplies the economy with cash via the banking system and PostFinance. While the operative side of electronic payments is handled by the SIX Group (which is jointly owned by the banks), and PostFinance. The National Bank oversees Swiss Interbank Clearing (SIC) and keeps the participants' accounts in this system. SIC is the major payment system in Switzerland, processing almost all interbank clearings from large-value transactions to mass-market transfers.

Interbank clearing system SIC

The electronic Swiss Interbank Clearing System (SIC) is operated by SIX Interbank Clearing Ltd a subsidiary of the SIX group, on behalf of the National Bank. The banks, and to some extent also PostFinance, execute their payments through this system. SIC has a direct link to SECOM, the securities clearing system of SIX SIS Ltd. This link makes it possible for securities and repo transactions to be carried out with simultaneous delivery and payment. Since May 2000, cheque transactions have been settled via SIC as well. Other payment services offered by banks, data carrier exchange, automatic debits (LSV) as well as transactions at ATMs, automated refuelling machines and ec-direct payments had already been integrated into SIC in previous years.

Continuous Linked Settlement System

September 2002 saw the start of the Continuous Linked Settlement (CLS) system. CLS is a global payments system that settles both sides of a foreign exchange transaction simultaneously and thereby eliminates settlement risks. The settlement via CLS of amounts in Swiss francs is made possible via a direct link between SIC and the CLS Bank, which operates the CLS system. In order for CLS to function smoothly, banks must submit their payments to SIC at certain times of the day. The intraday liquidity offered by the National Bank facilitates time-critical payment transactions for banks.

Euro payments of the Swiss banks

To give them access to TARGET (Trans-European Automated Real-Time Gross Settlement Express Transfer System), the Swiss banks and PostFinance run a special clearing bank in Frankfurt, the Swiss Euro Clearing Bank (SECB). The SECB operates the euroSIC clearing system, which is structured in a similar way to SIC. Most Swiss banks, in addition to PostFinance, execute their euro payments through this bank.