People’s initiative for compulsory cash acceptance in retail has failed

Cash has become less important as a means of payment for private households in Switzerland. Technological developments and the pandemic were the main drivers. According to the latest edition of the “Swiss Payment Monitor”, the share of cash payments by private individuals in physical stores, measured by the number of transactions, fell from 52 percent in 2019 to 29 percent towards the end of 2023.

But cash still has its appeal in the age of online shopping and payment apps: it is anonymous, it is accessible even to those who are not keen on technology, it works even if electronic systems fail, and you know what you have. The Federal Council and the National Bank have repeatedly stressed that they want cash to continue to exist.

But not everyone trusts such explanations. The Freedom Movement Switzerland launched two popular initiatives to anchor cash in the Federal Constitution. The initiators submitted the first in 2023. This initiative makes two demands: the federal government must always ensure the supply of cash, and replacing the Swiss franc with another currency would have to be put to a vote by the people and the cantons. In principle, this already applies, but not explicitly at the constitutional level.

This initiative has already turned out to be a success. Although the Federal Council rejected it, it sent a counter-proposal to Parliament in June that adopted the core demands of the initiative and raised the current legal framework to constitutional level. The counter-proposal contains just two simple sentences: “The Swiss currency is the franc. The Swiss National Bank guarantees the supply of cash.”

The president of the Swiss Freedom Movement is the computer scientist Richard Koller. He is not yet satisfied with the counterproposal because the government speaks of the “franc” instead of the “Swiss franc”. But this seems like a trivial difference.

Fruitless final spurt

Koller and his association encountered much more opposition with their second cash initiative. This goes far beyond the current legal framework. It demands that sellers in physical retail stores and other points of sale where products or services can be purchased directly must accept cash as a means of payment. In addition, this initiative contains fairly detailed specifications for the options for obtaining cash.

But this initiative has now failed. The deadline for collecting signatures expires this Saturday. The initiative will not come to fruition due to a lack of signatures, admitted the main initiator Richard Koller when asked: “We are certainly missing around 25,000 to 30,000 signatures.”

In June, Koller indicated that his association had collected around 70,000 signatures by then. At the time, he was confident that a final push would bring them to around 120,000 signatures. But the final push apparently didn’t bring much. Koller’s main reason for the failure is that the text of the initiative was “very extensive” and “too complicated.”

This applies not least to the requirements for the options for withdrawing cash. According to the text of the initiative, there should have been such options every two kilometers in cities, generally in at least one place in all communities with more than 1,000 inhabitants, and in communities with fewer than 1,000 inhabitants within 15 minutes by car or public transport.

Leaner initiative planned

The failure of this initiative is not the end of the story, as Richard Koller makes clear: “We have to look for a new way.” He announces a new initiative that is simpler and shorter, but will also contain the core requirement of making cash acceptance mandatory in retail stores. However, there will be no specifications for options for obtaining cash. According to Koller, the new initiative is expected to be launched next spring, but the timetable is not set in stone.

An obligation to accept cash would be a significant infringement on economic freedom. In principle, such an obligation to accept already exists under current law, but the parties involved can make a different agreement. In concrete terms, this means: If a store hangs up a sign clearly saying “No cash payments accepted” and the customer still buys something in the store, this is considered the decisive agreement. In 2022, the National Council clearly rejected a proposal for an obligation to accept cash with 130 no votes to 58 yes votes. Support came almost exclusively from the SVP parliamentary group.

At present, cash acceptance in retail is still high. According to the National Bank’s latest company survey, over 90 percent of face-to-face retailers accepted cash payments in 2023. The most frequently cited reason for acceptance was customer need.