Recent developments of consumption in Switzerland

November 9, 2020 (auch auf Deutsch)

Consumption is likely to be impacted by the new federal and cantonal measures that have been put into place in the past three weeks to fight Covid-19. On the federal level these new measures include (since 19 October) an extended obligation to wear masks; a closedown of nightclubs; additional restrictions for restaurants as well as public and private events.

Some cantons have implemented additional local measures which tend to be stricter in the western part of Switzerland. Geneva currently has the strongest measures in place. An overview can be found here.

Total domestic payment card transactions: Volume in CHF is only 2% higher than at the beginning of the year

Graph 1. Transaction Volume (in M CHF) per week by payment cards in the year 2020
  • During the past 4 weeks (October 8 – November 4), the total volume of domestic payments by debit and credit card as well as cash withdrawals amounted to 1994 M CHF per week. The total card transaction volume is thus 2% above the pre-COVID-19 level[1] (1,963 M CHF per week). The total level of payment card transactions in the past 4 weeks appears low, once adjusted for seasonal patterns in retail expenditures: For example, the retail trade index for Switzerland shows that in 2019 retail turnover was 7% higher in October than in January-March[2].
  • Payments by debit cards at point-of-sale (PoS) reached 812 M CHF per week during the past 4 weeks and are therefore 17% above the pre-COVID-19 level (694 M CHF per week).
  • Cash withdrawals by debit card and bank card during the past 4 weeks are 675 M CHF per week and thus 14% below the pre-COVID-19 level (783 M CHF per week).
  • Payments by credit cards at domestic point-of-sale (PoS) reached 378 M CHF per week during the past 4 weeks and are therefore 13% above the pre-COVID-19 level (334 M CHF per week).
  • Online payments by credit cards to domestic merchants reached 129 M CHF per week during the past 4 weeks and are therefore 15% below the pre-COVID-19 level (152 M CHF per week).

Debit card payments at point-of-sale: Slow-down in inner-cities since introduction of new federal Covid19 measures

  • On October 19 new federal measures were introduced to combat the rise in coronavirus infections. In the three weeks since then we have seen a significant slowdown in debit card payments at PoS. Compared to 2019 our data reveal an increase of 14% for the past 3 calendar weeks (CW43-45).  In the 4 prior weeks (CW39-42) the year-on-year difference was 21%[3].
  • During the past 3 calendar weeks CW39-42, the year-on-year change in debit card PoS payments has remained high for merchants in the category of “Food & Supermarkets” (+30% compared to 2019). By comparison the category “Other retail” (+7% compared to 2019) has seen a significant weakening compared to the prior 4 weeks ( +19% compared to 2019 during CW39-42).
  • Merchants in the categories “Accommodation & Restaurants” and “Entertainment” have seen the strongest decline in Debit PoS payments in the past 3 weeks. Payments for merchants in the category “Accommodation & Restaurants” reached their 2019 level (+0%) during CW43-45, compared to a +32% rise on 2019 figures for CW39-42. Payments for merchants in the category “Entertainment” were 38% lower than their 2019 level during CW43-45, compared to a +6% rise on 2019 figures for CW39-42.
Graph 2. Debit card transactions at PoS by merchant category and calendar week (in Million CHF).
  • The slowdown in Debit PoS payments is strongest in city-centre locations. In city centres, the year-on-year change in debit card PoS payments slowed to just  +5% for CW43-45 compared to 2019). In the prior 4 weeks the year-on-year change in debit PoS payments for inner-city locations was +17% compared to 2019. By comparison, the year-on-year change for merchants in commuting zones reached +23% in CW43-45 compared to +26% in CW39-42.
  • The recent decline in Debit PoS payments is particularly strong in Geneva which imposed a local shutdown of all non-essential shops from November 2. In the first week following the local shutdown debit card PoS payments decreased by 20% (CW45 vs. CW 44). By comparison in the same week of 2019 the decline was only 2%.
Graph 3. Debit card transactions at PoS by Swiss card holders by canton and calendar week (in Million CHF): Canton Geneva 
  • Spending by Swiss consumers in all neighboring countries has strongly declined over the past 3 weeks. For example, in Germany debit card transaction purchases by Swiss consumers at point of sale are 32% lower than in CW43-45 than in 2019.  In the prior 4 weeks (CW39-42) the transaction volume was slightly higher (+3%) than in 2019.
Graph 4. Debit card transactions at PoS by Swiss card holders abroad by country and calendar week (in Million CHF). 

Credit card transactions: Cross-border payments decline after the autumn holiday season.

  • After the autumn holiday season, credit card spending by Swiss consumers at foreign point of sales has decreased significantly. In the three weeks since mid October average cross-border PoS payments have amounted to 95 M CHF per week (October 15 – November 4) compared with 137 M CHF per week for the previous 4 weeks (September 17 – October 14).
  • Cross-border online credit card spending by Swiss consumers decreased by 6% in the last 3 weeks (October 15 – November 4:  141 M CHF per week) compared with the previous 4 weeks (September 17 – October 14: 154 M CHF per week).
Graph 5: Weekly cross-border credit card transactions by channel, 2020

[1] Due to the absence of data for the year of 2019, we cannot compare payment card transactions to the previous year. Thus, we compare the most recent data to the pre-COVID-19 period of 2020, i.e., the 10 weeks from 02.01. – 11.03.2020.

[2] http://monitoringconsumption.org/DHU_nowcast

[3] The overall increase of Debit PoS payments seems to be largely driven by a shift in payment behavior, with debit card payments replacing cash payments http://monitoringconsumption.org/Covid19_Cash

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