Earlier this week the Swiss National Bank (SNB) and SIX the Swiss Clearing House announced that the Swiss instant payments system is now live.  

Payments of up to CFH20,000 can be made and will happen in just a few seconds, covering 60 financial institutions. This is expected to cover over 95% of retail payments, with 100% reachable by the end of 2026. 

The announcement means that Switzerland catches up with the EU & US and many other countries around the world. The UK led the way back in 2007/8 when its Faster Payments Service went live and now processes 4.8bn payments per annum, worth £4tn, yet is still growing at double digits per year. In Europe, instant payments accounted for 17.8% of transactions according to the European Central Bank (ECB’s) February statistics, showing rapid growth. 

While this is great news for consumers, it is also great news for fraudsters. 

As all countries that have implemented instant payments have found, this results in an increase in fraud and scams. The UK for example is still seeing £611m (from both unauthorised and mainly authorised frauds) going to mule accounts, the vast majority of which are UK based domestic accounts. This is repeated globally and has drawn the attention of regulators. The UK will enforce 100% refund for authorised frauds from 7th October 2024, with beneficiary PSPs required to pay 50% to the sending PSP. 

High volumes of instant payments and their rapid growth directly affect fraud prevention. The sheer number of transactions makes it more challenging to identify fraudulent activity amidst legitimate usage, without either compromising customer experience or requiring extensive operational teams. 

Added to this, PSP’s in the EEA will also have to manage the new SEPA Instant Payments Regulation. This includes Switzerland (for SEPA Payments), so from January/July 2027 Swiss PSP’s will need to: 

• Provide credit transfers in Euros to provide instant transfers 24/7/365 at no premium to slower payments 

• Provide a service to check that the payee IBAN & Name match and inform the customer of discrepancies (similar to the UKs Conformation of Payee service) 

• Undertake EU sanctions screening at least once a day  

There is also the draft Payments Services Regulation (PSR) that, with Payments Services Regulation (PSD3), takes over and expands on PSD2. Whilst this does not directly cover Swiss Banks, given the need for alignment with the EU and overlap with the SEPA regulation, it is worth being aware of. 

 This adds further additional complexity with the key points being: 

• PSPs must have a specific Fraud Risk Framework 

• Use AI in transaction monitoring 

• Take lability for authorised frauds for PSP’s including AISPs & PISPs and electronic communications services providers (ECSPs) 

• Provide the IBAN to Name Checking for all payments 

• Suspect identifiers (IBANs etc.) and personas info must be shared for fraud prevention purposes. 

All of this underscores the need for Swiss PSPs to take proactive steps to shield their customers from fraud and mitigate increased liability. 

CYBERA, Co-Founded in Switzerland is well placed to help firms mitigate the fraud risk. First, we make it easy for PSPs to turn on authorised fraud reporting for their customers with our VSR product. We then automate the dispatch to beneficiaries and law enforcement to massively speed up the freezing of funds. This increases the opportunity for funds to be repatriated to victims. 

In addition to improved customer experience and lower losses, this also increases efficiency and disrupts the fraudsters. 

CYBERA also enables greater prevention and detection for both sending and beneficiary banks. Our Watchlist service can be used from KYC and onboarding, through the risk lifecycle and to prevent payments to and from known fraudulent accounts and fraudsters. My previous blog details a number of key points that are still relevant today.  

About CYBERA 

At  CYBERA  we’re on a mission to stop money laundering and help protect customers from scams and other financial cybercrime. We close gaps that allow cyber criminals to thrive by sharing crime data in real-time with financial institutions, fintech, and crypto exchanges, and coordinating a global response to support customers who have become victims of financial cybercrime.   

CYBERA WATCHLIST™ helps support firms to reduce fraud and money laundering and meet regulatory requirements as part of a holistic fraud and financial crime strategy.   

Financial Institutions (FIs) can check against the CYBERA WATCHLIST™ for confirmed mule accounts when processing payments. For outbound & inbound payments, where there is a match on either IBAN (Account Number & Sort code) or on Name the transaction can be flagged as high risk.