Monday , January 18 2021

BBC – Capital – Why the Swiss still love money

Last month, the Swiss discovered a new smart new banknote that would be buried in their wallets. The magnifying franchise of 1,000 francs was the latest in the series of the Swiss National Bank (SNB) to be re-examined. The new note is a bit smaller and shows that two people were handling the world; the theme is a communicative talent, according to the SNB.

And this is not an ordinary note, it is one of the most valuable book money in the world, worth about 880 euros ($ 1,007, £ 764). According to the latest data of the SNB, the circulation has more than 48 million, which represents about 60% of the value of all banknotes in Switzerland.

But this rearrangement comes when other states leave their notes with great value and as they reduce the use of cash in European countries, albeit at very different rates.

Bring your wallet

Discussing the new note in early March, SNB Vice President Fritz Zurbrug described the money for Switzerland as a "cultural phenomenon" and said the note of 1,000 francs "corresponds to what people want." It was popular for high-value purchases and paying bills in the post office, as well as for a "store with value," he added.

In Switzerland, money remains the dominant mode of payment. Here, there is an assumption that everyone brings cash, even in an increasingly digital economy. Most do not get involved in buying a sandwich or paying for a hairstyle when the card payment machine is wrong.

If you need to pay for a coffee with a note of 100 francs, there is no need to apologize – no one will ask if you have anything less. And for those large ticket items, some banks even allow you to withdraw up to 5,000 francs a day (or 10,000 per month) at an ATM without notice. Buying a car that costs tens of thousands of cash is also not so unusual.

The SNB survey in 2017, looking at the behavior of the payment of 2,000 Swiss participants, showed that they made 70% of their transactions in cash. Debit cards account for another 22%, followed by credit cards with 5%. Innovative methods, such as payment applications and pay-per-contact cards, are made very modest.

However, the report of the Bank for International Settlements (BIS) in 2018 says that globally many payments traditionally made in cash are carried out electronically. While neighbors like Germany seem to share Swiss affinity for cash, other European countries like Sweden and the Netherlands are moving much faster than it.

"Real money"

Why then do the Swiss want money? Two simple reasons are that cash is considered to be part of their culture and people believe that using it makes it easier to track spending. In Basel, 53-year-old Chris Troy confirmed this, saying many people he knew still prefer assurance that they will carry big bills in their wallet.

Philippe Chappuis, 44, advocates paying with a card or with a mobile application for payment – but for practical reasons. "I do not like my wallet to be full of coins," he says. However, he can understand why people want money, saying that using the SNB's negative interest rates has led to uncertainty over how banks can react and cause concern just to exist at a virtual level. Cash is more material, he feels: "You can be sure that you own it."

Jürgen Engler, like other merchants of the Basel Marketplace, only accepts cash. "Two or three customers a month are looking to pay with a card," he says. "When I go to the shops, I want to pay with a card, but when I go to a market or in a restaurant I always pay with real money."

However, despite the popularity of cash, the use of mobile payment applications, such as TWINT or V Pay, is starting to grow. A survey conducted in 2017 concluded that the percentage of Swiss consumers using mobile payments was occasionally set to increase.

Jane Ketner, 29, is part of a younger generation that covers these new ways of paying, but still finds cash payment and gives more control over its costs. "When it's electronic you will spend the money easier," she says.

It is a point repeated by Miguel Brandle, a psychologist and marketing professor at the University of Basel. "Lay Wisdom suggests that spending a virtual franc can be felt as if you spend less than spending a physical franc, but even if that's true and can be true, it's just not enough to explain why a society would like to have money , "He commented.

There is also an identity factor: the Swiss are identifying with cash partly because they see themselves. This is a nation that values ​​privacy and does not want to be told what to do. They see themselves as different from their European neighbors and carefully guard the traditions they sing, such as languages, the political system and the currency.

They see themselves as different from their European neighbors and carefully guard those traditions that separate them

Neighbors say high-value notes help criminals to launder money: 17 of the 19 central banks in the Eurozone have agreed to stop making notes of 500 euros to help prevent crime, and the German Bundesbank and the Austrian National Bank will soon they will follow the example.

High denomination notes also facilitate the withdrawal of large sums from bank accounts, especially at the end of the year when the Swiss have to declare their wealth on their bank statements. Fritz Zurbrügg rejected the idea that the 1,000 franc banknote is more commonly used by other criminals, but accepted that while consumer demand for money increases for Christmas, this may be because "research has shown other factors such as possible evasion tax ".

'Privacy, comfort'

Patrick Combouf of the Institute of Digital Business at the University of Applied Sciences at the HVZ in Zurich and a member of the Fintechrockers board, a think tank created by various groups of activists, believes that Switzerland will move away from money in time.

"The biggest password for a more efficient adoption of non-cash payments is a top-notch user experience. Unfortunately, this is also the worst in any of the concepts available in Switzerland today," he says. But he believes that the digital age is changing the power of the consumer financial services industry, leading to a greater focus on customer service.

Cryptocurrency and blockchain technology remain hot topics for Swiss new companies and established companies, and a recent study from the University of Lucerne showed that the Swiss growth of fines significantly accelerated in 2018 and in terms of number of companies and invested capital.

Jonathan Rea, CEO of Forinder, a Swiss business consultant, believes that any mass adoption of crypto-currency as a substitute for everyday transactions is at least ten years old. "For mass adoption, it depends on the compromise between privacy, comfort, self-identity, and perceived value of cash as a protection against getting into debt," he says.

For now, many Switzerland still appreciate the anonymity and the freedom offered by the money. New notes emerge in the world. Simply put, they are elements of beauty. That is if you can store them in your wallet for a long time.

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