Methods of Payment
Switzerland has a sophisticated system of banking and finance, in which most methods of payments familiar to U.S. companies are available, including open account, letter of credit, cash in advance, documentary collection, and factoring. For B2C transactions, payments through postal pay-in slips, online banking, and various mobile applications are also widely used.
When conducting business with Swiss banks, the most common trade finance instruments offered will be letters of credit (sometimes referred to as documentary credit), documentary collections, and bank guarantees.
The following credit-rating agencies have been recognized by the Swiss Financial Market Supervisory Authority (FINMA): A.M. Best Rating Services Inc., DBRS, fedafin AG, Fitch Ratings, Moody’s Investors Service, Scope Ratings, and Standard & Poor’s Ratings Services.
Swiss companies behave reliably when it comes to payment and usually pay in advance or within 30 days. Should an entity fail to pay its debts, however, debt collection agencies can help with contacting a debtor and providing advice throughout the collection process. Domestic or international agencies that regularly operate in Switzerland possess a thorough knowledge of customary practice and applicable laws and remain unaffected by language barriers. If debt collection cannot be settled amicably, the matter may be brought before the Debt Collection Office (Betreibungsamt) of the appropriate canton, which will initiate legal action.
For information on routine monetary transactions and accepted credit cards, please refer to the currency section of the Business Travel chapter. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Banking Systems
Switzerland is one of the world’s foremost banking and financial centers, with 228 banks as of 2021, according to the Swiss National Bank (SNB). The banking network is highly developed, and Swiss banks are among the world’s leaders in specialized fields, such as private banking and asset management. The total assets of Swiss banks at the end of 2020 amounted to approximately $4.1 trillion (3.9 trillion CHF), including assets managed by Swiss banks abroad. The banking landscape in Switzerland is diverse, including universal banks, cantonal banks, private banks, and wealth and asset managers.
Established in 1907, the SNB conducts the country’s monetary policy as an independent central bank. It has executive offices in Bern and Zurich and branch offices in Basel, Geneva, Lausanne, Lucerne, Lugano, and St. Gallen. More than half of its share capital is held by the cantons, cantonal banks, and other public bodies. The remaining shares are largely held by private persons; unusually for a central bank, the SNB’s shares are listed on the Swiss stock exchange SIX.
The SNB’s primary goal is to ensure price stability, while taking due account of economic developments. It determines and implements monetary and credit policy, has the exclusive right to issue or withdraw bank notes and coins, and serves as a clearing house for interbank transfers. Furthermore, it has an arrangement with the Principality of Liechtenstein to permit the use of the Swiss franc as that country’s currency and clears Liechtenstein’s transactions.
The SNB Bank Council oversees and controls the conduct of business by the SNB. It consists of 11 members. The Federal Council, Switzerland’s highest executive authority, appoints six SNB Council members, including the SNB President and Vice President. SNB shareholders appoint the remaining five members. The SNB’s managing and executive body is the Governing Board, which is responsible for monetary policy, asset investment strategy, and international monetary cooperation. The Enlarged Governing Board consists of the three members of the Governing Board and their deputies. It is responsible for strategic and operational management.
The Financial Market Supervisory Authority (FINMA) is responsible for the government supervision of banks, insurance companies, stock exchanges, and securities dealers as well as other financial intermediaries in Switzerland. FINMA was formed in 2009 as a merger of the Federal Office of Private Insurance (FOPI), the Swiss Federal Banking Commission (SFBC), and the Anti-Money Laundering Control Authority. The aim of FINMA is to protect creditors, investors, and insured persons, and to ensure the general functioning of financial markets in accordance with legislation. It thus helps reinforce Switzerland’s image and competitiveness as a financial center. The provisions of criminal law on money laundering are binding for all providers of financial services.
The Anti-Money Laundering Act, the Anti-Money Laundering Ordinance, and the FINMA Anti-Money Laundering Ordinance establish the legal basis for combatting money laundering in Switzerland, strengthening due diligence obligations on the part of banks and other financial intermediaries. In March 2021, Swiss parliament passed revisions to Switzerland’s Anti-Money Laundering Act with additional requirements to verify the identity of the beneficial owners of company customers, and to periodically check that customer data is up-to-date.
The Swiss banking system includes two large universal banks, UBS and Credit Suisse, 24 cantonal banks, a network of cooperative Raiffeisen banks, private banks, PostFinance, foreign banks, commercial and investment banks, and consumer credit institutes.
The private sector is dominated by the two largest banks in Switzerland, UBS and Credit Suisse. Together they account for nearly 50% of the assets of all Swiss banks. Cantonal banks are defined as banks with a statutory basis under cantonal law, with the canton holding a minimum of one-third of the banks’ capital and voting rights. The 24 cantonal banks are engaged in all banking businesses with an emphasis on lending and deposits. The Raiffeisen banks are affiliated independent banks with strong local roots and organized along cooperative lines. In recent years, Raiffeisen has positioned and established itself as the third largest banking group and the leading retail bank in Switzerland. Raiffeisen banks count 3.6 million Swiss residents among their customers. Of these, some 1.9 million are members of the cooperative, and hence co-owners of their Raiffeisen bank.
The activities of Post Finance are run by the governmental postal service and include payments, investments, savings, mortgages, loans, and provident and retirement planning. Around 2.7 million private customers use postal accounts and the PostFinance Card.
The 69 foreign-controlled banks in Switzerland at the end of 2019 each have a majority shareholder domiciled abroad. U.S. banks with a presence in Switzerland include Citibank, Goldman Sachs, JPMorgan, Merrill Lynch and Morgan Stanley. All foreign banks in Switzerland are subject to the same laws and supervision as banks whose majority shareholder is Swiss.
SIX Group is one of Europe’s leading securities exchange operators, and is owned by its users (120 banks of various sizes). SIX Group operates financial infrastructure on the Swiss and Spanish markets, and with services relating to securities transactions, the provision of financial information and banking services. The company also provides services in clearing, settlement, card payments, securities safekeeping, and administration, while supplying international financial information for investment advisors, portfolio managers, financial analysts and administrators of securities transactions. SIX Interbank Clearing operates the SIC and euroSIC interbank payment systems.
Foreign Exchange Controls
The Swiss franc is freely convertible. With the exception of certain regulations applicable to banks and finance companies, there are no exchange controls. The Swiss National Bank has authority to introduce measures on minimum reserve requirements, foreign currency positions, foreign source funds, and a calendar for public issues of bonds and shares, but such measures are foreseen for use in exceptional circumstances only. Bank accounts may be maintained in local or foreign currencies either within or outside Switzerland without restriction. There is no distinction between resident and nonresident accounts.
Repatriation of capital, loans, dividends, interest, royalties, service fees, and branch office profits can be transacted without limitation through any bank. Export proceeds may be disposed of freely. Leading and lagging of import and export payments is allowed; there are no limitations and no requirements for prior authorization. Netting of trade-related payments and financial transactions is also allowed without prior authorization.
U.S. Banks and Local Correspondent Banks
Bank Morgan Stanley, Ltd.
Beethovenstrasse 33
8002 Zurich, Switzerland
Tel: +41 44 588 1000
https://www.morganstanley.com
Citibank (Switzerland) AG
Hardstrasse 201
8010 Zurich, Switzerland
Tel: +41 58 750 5000
https://www.citigroup.com
Citibank (Switzerland) AG
Quai de la Poste 2
1204 Geneva, Switzerland
Tel: +41 58 750 5000
https://www.citigroup.com
Goldman Sachs Bank AG
Claridenstrasse 25
8021 Zurich, Switzerland
Tel: +41 44 224 1000
https://www.goldmansachs.com
Goldman Sachs Bank AG
Rue de la Confédération 7
P.O. Box 3666
1211 Geneva, Switzerland
Tel: +41 22 816 6000
https://www.goldmansachs.com
J.P. Morgan (Schweiz) AG
Dreikönigsstrasse 21
8002 Zurich, Switzerland
Tel: +41 44 567 4500
https://www.jpmorgan.com
J.P. Morgan (Suisse) SA
Rue de Confédération 8
1211 Geneva, Switzerland
Tel: +41 22 744 1111
http://www.jpmorgan.com
Merrill a Bank of America Company
Global Banking and Markets
Stockerhof
Stockerstrasse 23
8000 Zurich
Tel: +41 44 297 7400
https://www.ml.com
To access Switzerland’s ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.