The right way to pay: What you need to know

Coins and banknotes are still one of the most popular methods of payment in Switzerland, even if cash has recently fallen out of favor due to the coronavirus crisis. This isn’t surprising, since cash is less hygienic.

Advantages of cash

• Security and anonymity: When you pay with cash, no personal data is collected and you are protected from cyber attacks during the transaction.
• You spend less: Coins and notes are said to result in more frugal consumer behavior. Unlike cashless payment, you see the immediate effect of spending in your wallet.
• No technical infrastructure required: Although increasingly rare, there are still places or vending machines where you can only pay cash. You can also pay in cash if there is a technical failure, for example, at a card terminal. Additionally, some points of sale do not accept cards or charge a fee.

Disadvantages of cash

• Safekeeping and risk of loss: For large amounts, it is harder to store cash in comparison with other methods of payment. Cash is also easily stolen or lost, although this is often hard to prove. 
• Hygiene: Cash has also fallen out of favor recently for reasons of hygiene. Banknote and coins can spread viruses and bacteria.

The debit card is the most popular method of payment in Switzerland. Credit cards are also frequently used. The coronavirus has given debit and credit card payment a further boost. What are the advantages and disadvantages of card payments?

Advantages of paying by card

• Cashless and contactless payment: Most cards now let you make contactless payments up to a certain amount. Cashless payment is itself an advantage: no need to carry any banknotes or coins. 
• Can be used online and worldwide: Digitalization has also made card payment more popular, because it makes it easy to shop online, particularly with a credit card. Most cards of major providers are accepted worldwide as a method of payment. 
• Additional services: Credit card holders often benefit from attractive additional services such as insurance or a bonus or loyalty program.

Disadvantages of paying by card

• Fees: The use of cards as a payment method is subject to various fees, for example, annual credit card fees or fees when withdrawing money abroad.
• Less anonymity and control: Data about the transaction is always be transmitted if you pay by card, to the shop owner, for example. Keeping tabs on your spending can also be harder.
• Risk of fraud: Paying with cards is becoming more and more secure – but you're never completely protected from fraud. 

Mobile payment shows how much payment methods have changed in recent years. Think of how you can now pay via smartphone using apps like TWINT, Apple Pay, Samsung Pay, or Google Pay. These methods of payment are also increasingly used in Switzerland.

Advantages of mobile payment

• Convenience: It’s hard to imagine leaving the house without your smartphone. Thanks to mobile payment, you always have a method of payment at hand. And mobile payment is increasingly accepted when shopping online.
• Contactless payment: Payment is processed via your smartphone. This means you don’t have to take cash in your hands or enter your pin at a terminal.

Disadvantages of mobile payment

• Availability: While you can pay almost anywhere by card and by cash, mobile payment is not as widely accepted yet. Additionally, there are many different apps that are not accepted everywhere and, in particular, whose availability varies from country to country. 
• Anonymity and security: Similar to card payments, mobile payment also transmits data. Fraud or loss of the device poses further risks.  

Cryptocurrencies such as the internet currency Bitcoin are no longer new and have been widely discussed in the media in recent years. They have made a name for themselves mainly because of speculation about price gains. But how good are currencies like Bitcoin or Ripple as methods of payment?

Advantages of cryptocurrencies

• Decentralization and anonymity: One advantage of cryptocurrencies is block chain technology, which allows for decentralized payment processing – i.e., without the need for institutions like banks. This also means payments can be made without data being transferred to financial firms. 
• Low fees: Cryptocurrency payments involve little or no transaction costs.

Disadvantages of cryptocurrencies

• Availability and prevalence: Although the number of service providers and shops accepting cryptocurrencies is increasing, the prevalence and availability is still very limited and is focused on online payments. Access to and storage of cryptocurrencies is also more difficult than with other methods of payment.
• Many providers but no real opportunity to compare: Not only are there countless different cryptocurrencies, but there are also a multitude of different providers where you can obtain them. Comparing them is hard. For example, they may differ in price, user-friendliness, and payment methods. 
• Volatility: The prices of cryptocurrencies are highly volatile. Within only a few weeks, the price of Bitcoin fell from its peak of 20,000 Swiss francs in 2017 to around 10,000 francs. Holding cryptocurrencies can be a risky investment.