The Swiss National Bank and European Central Bank launched an exploration phase to connect their instant payment infrastructures, aiming to enable real-time transactions across Swiss francs and euros. The initiative targets completion of feasibility assessments by the end of 2026.
What to Know:
- The Swiss National Bank and European Central Bank are evaluating whether to link the Swiss Interbank Clearing System with the Eurosystem's TARGET Instant Payment Settlement service
- Cross-currency instant payments would allow funds to transfer between Swiss franc and euro accounts within seconds
- The exploration phase runs through 2026 and will assess both technical feasibility and economic viability
Technical Infrastructure Under Review
The project would connect two major payment systems. Switzerland operates the Swiss Interbank Clearing System, while the Eurosystem manages TIPS, the TARGET Instant Payment Settlement service. Both systems currently handle domestic instant payments within their respective currency zones.
"This initiative supports the general goal of making cross-border payments faster, cheaper, more transparent and more accessible," the Swiss National Bank said in a statement Monday.
The central bank did not provide specific timelines beyond the 2026 exploration deadline.
The proposed link would enable transactions originating in one currency area to appear in accounts in the other currency area within seconds. Current cross-border payments between Switzerland and eurozone countries typically require longer processing times and involve multiple intermediary banks.
Understanding Instant Payment Systems
Instant payment systems allow funds to transfer between bank accounts in real time, typically within seconds rather than the hours or days required by traditional bank transfers.
The Swiss Interbank Clearing System processes domestic Swiss franc transactions, while TIPS handles euro-denominated payments across the 20 countries using the euro.
Cross-currency instant payments represent a technical challenge because they require coordination between separate financial infrastructures operating in different regulatory environments. The systems must reconcile exchange rates, settlement procedures and compliance requirements simultaneously. Banks in both currency zones would need to maintain liquidity in both francs and euros to facilitate immediate transfers.
The economic viability assessment will likely examine transaction costs, implementation expenses and potential demand from businesses and consumers. Financial institutions would need to invest in system upgrades and staff training to support the linked infrastructure.
Neither central bank disclosed projected costs for the project or estimated transaction volumes. The SNB statement provided no details about specific technical standards or protocols under consideration for the interlink.
Final Thoughts
The Swiss National Bank and European Central Bank are conducting a multi-year feasibility study to connect their instant payment systems, potentially enabling real-time transfers between Swiss franc and euro accounts by 2026. The initiative seeks to reduce costs and processing times for cross-border transactions between Switzerland and the eurozone.
