Payments - Introduction / Learning brief
Swiss Interbank Clearing: SIC and euroSIC
Your notes
In simple terms / 01
What this means in plain language
SIC is Switzerland's real-time gross settlement system for Swiss francs, operated by SIX for the Swiss National Bank with a cover check before settlement; euroSIC handles euro payments and is being discontinued at the end of 2027.
SIC (Swiss Interbank Clearing) is Switzerland's system for settling Swiss franc payments between banks. It works on an RTGS (real-time gross settlement) basis, so each payment is settled individually and with finality in central-bank money. It is operated by SIX on behalf of the Swiss National Bank, the country's central bank. A defining feature is the cover check: before a payment settles, the system verifies that the sending bank actually has enough funds in its settlement account. If the cover is not there, the payment waits in a queue rather than settling, so a bank can never settle money it does not have. Alongside it, euroSIC handles euro-denominated payments and relies on a settlement bank to reach the euro system. euroSIC is being discontinued at the end of 2027, so euro flows are moving to other arrangements.
Complete lesson / 02
Understand the full idea, step by step
What does a payment system do when a bank tries to pay with money it does not have? Most systems in this course answer with a rejection or with credit. Switzerland's answer is calmer and stricter at the same time: check the cover first, and if it is not there, let the payment wait. That one design choice shapes the whole character of SIC.
SIC: the Swiss franc RTGS
SIC — Swiss Interbank Clearing — is Switzerland's real-time gross settlement system for the Swiss franc. Each payment settles individually, at full value, continuously through the day, in central-bank money held at the Swiss National Bank (SNB), so every settled payment is final. The operating arrangement is a division of labour you will meet in many countries: the technology is run by SIX, a financial-infrastructure company, on behalf of the SNB, while the central bank supplies the money and the ultimate authority. One Swiss peculiarity: SIC carries not only large interbank payments but also a high volume of small retail payments — unusual for an RTGS, where most countries route retail traffic to separate systems.
SIC at a glance
- Currency
- Swiss franc (CHF)
- Model
- RTGS — each payment settles individually and finally
- Settlement asset
- Central-bank money at the Swiss National Bank
- Operator
- SIX, on behalf of the SNB
- Distinctive feature
- A cover check before settlement, with a queue instead of rejection
- Traffic
- Large-value interbank and retail payments on one system
The cover check and the queue in action
- INSTRUCTION
Bank Alfa submits the CHF 3,200,000.00 payment instruction to SIC, destined for Nordbank.
- VALIDATION
SIC performs the cover check: does Bank Alfa's settlement account hold at least CHF 3,200,000.00? Right now it holds CHF 2,000,000.00 — the answer is no.
- CLEARING
The payment is not rejected. It enters the queue, where it waits and is reconsidered as Bank Alfa's balance changes.
- SETTLEMENT
CHF 1,500,000.00 arrives from another participant, lifting Bank Alfa's balance to CHF 3,500,000.00. The cover check now passes.
- SETTLEMENT
SIC settles the payment: Bank Alfa's account is debited and Nordbank's credited, in central-bank money, with finality. The queue did its work without anyone intervening.
- NOTIFICATION
Both participants see the settlement; Nordbank can credit the supplier at once. Bank Alfa's account shows CHF 300,000.00 remaining.
| Balance when the payment was submitted | CHF 2,000,000.00 |
|---|---|
| Payment awaiting cover | CHF 3,200,000.00 |
| Incoming payment received later | CHF 1,500,000.00 |
| Balance at re-check | CHF 3,500,000.00 |
| Balance after settlement | CHF 300,000.00 |
The queue turns intraday liquidity into a flow problem rather than a pass-fail test. Because participants are continuously receiving as well as sending, a briefly-short balance usually rights itself — and the system keeps moving instead of stalling on one payment.
Why queue the payment instead of simply rejecting it and asking the bank to resend?
Because rejection punishes timing, not solvency. Bank Alfa's money was an hour away, not missing. Rejecting would force every participant to hold fat buffers or resubmit constantly; queueing lets the system settle payments the moment cover exists while still guaranteeing the rule that matters: no participant ever settles value it does not hold. That protects everyone else in the system, and it pushes banks toward active intraday liquidity management — watching inflows, timing outflows, prioritising the payments that must not wait.
euroSIC: the euro leg beside the franc system
Alongside SIC sits euroSIC, which processes euro-denominated payments for Swiss and connected institutions. Here the design must differ, for a simple reason: the euro is not Switzerland's currency, so there are no central-bank euro accounts at the SNB to settle across. Instead euroSIC works through a designated settlement bank that holds the euro liquidity backing the flows and provides the connection into the euro area's own payment systems. This is the standard pattern for operating a foreign-currency system outside that currency's home central bank — settlement in commercial-bank money, anchored by a bank with direct access to the currency's home infrastructure.
WHAT IF — euroSIC is scheduled to be discontinued on the operator's timeline (verify against current SIX/SNB announcements)
What happens: The euro leg of the Swiss arrangement is wound down: institutions that route euro payments through euroSIC lose that path and must have alternatives live before the closing date.
How it is handled: Participants plan migrations well ahead — typically moving euro flows to euro-area systems through other routes, such as correspondent arrangements or direct participation where eligible. Payment infrastructures are not permanent fixtures; they are consolidated or replaced as standards, volumes, and cross-border links evolve, and the practitioner's job is to track the official timeline and prove the new path works long before the old one closes.
COMMON CONFUSION
“A queued SIC payment has partly settled — the receiving bank can already count on the money.”
A queued payment has settled exactly as much as an unsent one: not at all. No value moves until the cover check passes and SIC posts the debit and credit. Nordbank sees nothing final until that moment, and neither bank should treat a queue entry as money. The queue is a waiting room for instructions, not a halfway state of settlement — on an RTGS system, settlement is all-or-nothing per payment.
STRICTLY SPEAKING
Strictly speaking, SIC's operating hours, queue prioritisation rules, participation criteria, and the SNB's intraday liquidity facilities are set by the SNB and SIX and change over time; the euroSIC wind-down likewise follows the operator's official schedule. Treat the model here — cover check, queue, final settlement in central-bank money — as the durable design, and check the current SIX and SNB publications for parameters and dates.
FOR NOW, REMEMBER
- SIC is Switzerland's RTGS for the Swiss franc: individual, final settlement in central-bank money at the SNB, with the technology operated by SIX.
- A cover check precedes every settlement; a payment without cover queues and settles automatically once incoming funds lift the balance.
- SIC unusually carries both large-value and retail payments on one system.
- euroSIC handles the euro leg through a settlement bank rather than central-bank euro accounts — and is being discontinued at the end of 2027, so euro flows are migrating to other routes.
TRY IT YOURSELF
At 10:05 Maya, monitoring Bank Alfa's SIC activity, sees a CHF 4,000,000.00 payment sitting in the queue for lack of cover. A colleague suggests telling the beneficiary's bank the money 'is on its way and as good as received'. What should Maya do?
SIC's cover-check-and-queue is one national answer to a universal question: how infrastructures balance finality against liquidity. The topic behind this lesson lines up the world's market infrastructures so you can compare their answers.
KEEP GOINGKey takeaways / 03
Three things to remember
- 01
SIC settles Swiss franc payments individually and with finality in central-bank money, operated by SIX for the Swiss National Bank.
- 02
A cover check confirms the sending bank has sufficient funds before a payment settles, queuing it otherwise.
- 03
euroSIC handles euro payments via a settlement bank and is being discontinued at the end of 2027.
Practical use cases / 04
Where you would use this
A Swiss bank settles high-value and retail Swiss franc payments with immediate finality through SIC.
A bank manages its settlement account through the day so queued payments release as incoming funds arrive.
An institution plans a migration of its euro payment flows ahead of the euroSIC discontinuation at the end of 2027.
Worked example / 05
Put the idea into a real situation
Illustrative example: a fictional bank, Glarus Kantonal, submits a CHF 3,200,000.00 payment to SIC while its settlement account holds only CHF 2,000,000.00. The cover check finds insufficient funds, so the payment does not settle; it waits in the queue. Later the bank receives CHF 1,500,000.00 from another participant, lifting its balance to CHF 3,500,000.00. The queued payment now passes the cover check and settles with finality, leaving CHF 300,000.00.
Operational sequence / 06
Follow the message and decision path
This compact sequence is a learning model. Exact routing and rulebook behavior can vary by scheme, participant, and implementation.
Read the steps as text
- 01MessageBank Alfa submits the payment orderBank Alfa (sending bank) → SIC / SIX Interbank Clearing
The sending bank transmits its SIC payment order to SIX Interbank Clearing, which operates the system on behalf of the SNB. This is an instruction — no money has moved yet.
- 02ProcessingSIC verifies sufficient coverSIC / SIX Interbank Clearing
SIC checks that Bank Alfa's settlement account holds enough of an SNB sight deposit balance to fund the order. An RTGS system settles only when the money is actually there.
- 03SettlementSIC settles the payment on SNB sight deposit accountsBank Alfa (sending bank) → Nordbank (receiving bank)
SIC settles the order individually, irrevocably and with finality in central-bank money, debiting Bank Alfa's sight deposit account at the SNB and crediting Nordbank's — one payment at a time.
- DR Bank Alfa's sight deposit account at the SNB — CHF 1,200,000.00
- CR Nordbank's sight deposit account at the SNB — CHF 1,200,000.00
- 04MessageNordbank is confirmed of the settled paymentSIC / SIX Interbank Clearing → Nordbank (receiving bank)
SIC advises the receiving bank that the funds are final on its SNB sight deposit account, with the details of the payment it now needs to book to its customer.
- 05PostingNordbank books the fundsNordbank (receiving bank)
Because the interbank leg already settled with finality in central-bank money, Nordbank can credit the beneficiary's account without waiting for anything else.
- CR Beneficiary's account at Nordbank — CHF 1,200,000.00
Evidence & review / 07
Evidence & review
SIC (Swiss franc RTGS, operated by SIX for the Swiss National Bank) and euroSIC (euro payments via a settlement bank); Switzerland and connected institutions. euroSIC discontinuation stated for end of 2027 per operator communications as of the review date.
What this brief simplifies: Queue prioritisation rules, operating hours, participation criteria, and SNB intraday liquidity facilities are described qualitatively. The worked example shows one payment and one inflow; real queues resolve many payments continuously. euroSIC's settlement-bank mechanics are compressed to the conceptual pattern.
Sources for this brief3
- Market practice
Principles for financial market infrastructures ↗ — CPMI and IOSCO (Bank for International Settlements) · Principles for financial market infrastructures — settlement finality, liquidity risk
Published by the CPSS (now CPMI) and IOSCO; contains 24 principles plus responsibilities for authorities. This site uses it only for high-level concepts such as settlement finality.
- Market practiceMarch 2003 edition
A glossary of terms used in payments and settlement systems ↗ — CPSS (now CPMI), Bank for International Settlements · RTGS, cover, queueing, settlement asset
Terminology has evolved since this edition; newer CPMI publications refine some definitions.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal · Bank Alfa queue scenario; euroSIC discontinuation timeline noted for periodic re-verification against SIX/SNB announcements
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.