What is instant payment? All about the advantages and how it works
Whether you want to transfer CHF 5 or CHF 5,000, the new technology makes it possible in real-time. But what exactly is behind it? Here, you will learn everything about how instant payments work, their benefits, and how to use them.
What is an Instant Payment?
An instant payment is an electronic transfer that is processed within ten seconds. This means the amount is immediately credited to the recipient’s account, regardless of whether the currency is CHF, Euro, or Dollar. Additionally, the payment is independent of the time of day or the day of the week the transfer is made. Even on holidays, the transaction is processed. The following table provides an overview of the key characteristics:
| Feature | Instant Payment | Traditional Transfer |
|---|---|---|
| Speed | Within 10 seconds | Can take hours or days |
| Availability | 7 days a week, 365 days a year (including weekends and holidays) | Depends on bank hours |
| Security | High, due to digital safeguards | Standard security mechanisms |
The Importance of Instant Payments in Modern Transactions
Instant payments are becoming increasingly important as they enable fast and secure transactions. They are particularly useful for businesses that need immediate liquidity and for individuals who need to transfer money quickly. Regular bank transfers often take one to two days. An instant payment, on the other hand, is processed in real-time. For those who rely on quick credits, this is the ideal payment option.
How Do Instant Payments Work Technically?
A real-time payment is no more complicated to process than a regular bank transfer. It works as follows:
- The paying party initiates the transaction via the bank app on a smartphone or through online banking on a computer.
- The bank checks the availability of funds in the payer’s account.
- The payment is transmitted to the recipient’s bank.
- If the transfer limit (CHF 20,000) is not exceeded, the credit is made immediately.
- The payer’s account is debited immediately.
What Steps Are Needed to Initiate and Confirm a Payment?
Initiating an instant payment is simple and can be done in just a few steps:
| Step | Description |
| 1. Selection | Choose the instant payment option |
| 2. Verification | Check current account balance |
| 3. Confirmation | Receive execution confirmation |
| 4. Credit | The recipient receives the money |
Advantages of Instant Payments
This new payment method offers numerous benefits for both senders and recipients in private and business transactions.
Speed and Efficiency
- Processed within ten seconds
- Recipients with a CH or LI IBAN receive the money immediately
- Especially useful for emergency payments, as the amount is instantly available
24/7 Availability
- Payments are available 7 days a week, 365 days a year
- Transfers can be made during the day, at night, or even on holidays
Security and Reliability
- Reduction of credit risk
- Instant payments immediately impact accounts, avoiding booking delays
- Eliminates uncertainties and credit risks
Popular Instant Payment Apps
One of the most well-known payment apps in Switzerland is TWINT. It is considered a must-have mobile app by many. Payments via Apple Pay and Google Pay are also becoming increasingly popular in Switzerland.
Integration of Instant Payments into Mobile Banking Apps
More and more banks are offering this function in their digital banking settings and mobile apps. UBS Switzerland has enabled instant payments since August 2024. Other major banks like ZKB and Raiffeisen also now offer this service to their customers.
| Bank | Instant Payments |
| UBS Switzerland | Yes |
| ZKB | Yes |
| Raiffeisen | Yes |
Are Instant Payments Free?
Generally, they are free. However, some financial institutions may charge small fees.
Security Measures for Using Payment Apps
Payment apps are becoming increasingly popular. They can be used 24/7, and payments via TWINT are easy and user-friendly. However, some security aspects should be considered:
- Use secure passwords
- Never share your login details with third parties
- Beware of phishing and spoofing attacks
- Avoid using unsecured networks for transactions, whether large or small
SEPA Instant Credit Transfer: What Does Instant Payment Mean in Europe?
With SEPA instant payments, international transactions can also be processed in real-time. However, receiving SEPA instant payments depends on whether the bank participates in the system.
How Could Instant Payments Change Transactions?
Instant payments have the potential to revolutionize global transactions. After all, they offer numerous advantages.
Efficiency in the Financial Sector
- Fewer delays due to instant payment speeds
- Security through cutting-edge technology – even if a phone is hacked
Conclusion
Instant payments offer numerous benefits, from speed to 24/7 availability. They are the future of digital transactions and are making traditional bank transfers increasingly obsolete. With instant payments, individuals and businesses can process transactions within seconds, eliminating the typical waiting times associated with traditional bank transfers. This improves liquidity and enhances the efficiency of business processes.
For example, if you and your partner use a budget app, you can initiate transactions within seconds. Are you still looking for the right app to manage your finances? Check out our guide on the best budget apps.
Additionally, instant payments promote financial inclusion by allowing people without access to traditional banking services to participate in digital transactions. Mobile wallets and other digital payment methods are expanding rapidly in many countries, offering a user-friendly interface for those who want to avoid cash or checks.
Security is another key factor. Advanced technologies like blockchain and encryption make instant payments not only fast but also more secure than ever. Banks and payment service providers continuously work to enhance security standards and minimize fraud attempts, benefiting customers in the process.
Overall, we are at the beginning of a revolution in payments, driven by technological innovations and changing customer needs. Instant payments have the potential to fundamentally change how we transfer money and enable new business models based on speed and efficiency.
Frequently Asked Questions (FAQ)
Can I cancel an instant payment?
Generally, this is not possible.
Do instant payments work internationally?
Yes, with SEPA instant payments, transfers can be made within Switzerland and beyond.
Are instant payments secure?
Yes, modern encryption technologies guarantee security for all parties involved.
Is there a special payment app for instant payments?
Yes, e.g., the TWINT app.
What does instant payment mean in banking?
It means that money is credited to the recipient immediately, making transactions faster and more efficient.
Which banks offer instant payments?
UBS, ZKB, Raiffeisen, and many more provide instant money transfers.
How can I initiate and confirm a payment?
By selecting the option in the banking app when making a new transfer.
Are there additional fees for instant payments?
This depends on the financial institution.
Are instant payments really processed within seconds?
Yes, usually within ten seconds after initiating the transfer.
What is an instant payment and how does it work?
A payment that is processed in real-time, transferring money from one account to another within seconds.
