ZURICH - Swiss companies and consumers are now able to make instant electronic payments, catching up with other European financial centres where the ultra-fast transfers are increasingly popular.

Instant payments allow credit transfers within 10 seconds of a payment being made rather than waiting for days for the transaction to clear. They have been in use in Europe since 2017 and in the U.S. since last year.

In Europe, the use of instant payments has risen from 5.2% of all credit transfers in October 2019 to 17.8% in February this year, according to the European Central Bank.

Around 60 financial institutions are able to receive and process instant payments, covering more than 95% of Swiss retail payment transactions, the Swiss National Bank said on Wednesday, having launched its scheme with financial systems provider SIX.

In the coming months, further banks will announce similar services, the SNB said, with all financial institutions in Switzerland expected to be on board by the end of 2026.

Despite the rise of mobile payment apps, the Swiss remain attached to physical cash, which remains the most accepted method of payment by companies with physical points of sale, according to an SNB survey earlier this year.

"This market launch represents a further important milestone and reflects the collective stakeholder commitment to the future of cashless payments in Switzerland," the SNB said.

While traditional payments are still possible, the central bank expects instant payments to become established in the medium term, the central bank added.

Instant payments reduce settlement risk as the transfer is instantaneous and final, while both parties have an up to date account balance at all times, making planning and budgeting easier.

The speeding up of payments could also boost economic development, as companies can more rapidly reinvest the money they receive.

(Reporting by John Revill, Editing by Miranda Murray and Elaine Hardcastle)