Czech banks are on the verge of launching a groundbreaking service that enables individuals to transfer money to others without the need for the recipient’s account number. Instead, the recipient’s mobile number alone will suffice to initiate the transaction. Expected to be unveiled in the upcoming fall, this innovative offering aims to simplify and expedite peer-to-peer money transfers.

A consortium of nine banks, including major players like Česká spořitelna and Komerční banka, has demonstrated interest in participating in this service. The Czech National Bank will play a pivotal role in its execution by maintaining a registry where mobile numbers will be linked to corresponding account numbers. When a sender initiates a payment, their bank will access this registry to retrieve the recipient’s account number using their mobile number.

To receive payments through this novel method, recipients will need to register their mobile number with their bank. The process entails using mobile or internet banking to complete registration, which involves a one-time verification code sent to the registered mobile number. Once this step is accomplished, recipients can seamlessly receive payments without further involvement from the central bank.

Functionally, the service will closely mirror existing mobile and internet banking interfaces. Users will input the recipient’s mobile number instead of an account number, with the sender’s bank subsequently retrieving the necessary account details from the registry to finalize the transaction. Payments will be processed immediately, with visibility in the sender’s mobile or electronic banking app.

Though the core functionality will remain uniform, variations might arise across different banks. These variations could encompass limits on the amount that can be transferred via this service. For instance, Komerční banka intends to apply the same limits to mobile payments as it does to payments involving account numbers, setting a cap of 400,000 Czech koruna per transfer.

This innovative service is poised to benefit individuals who lack access to traditional banking services or are hesitant to share their account details. It could also streamline the transaction process, enabling users to send and receive funds swiftly without grappling with account number intricacies.

It’s essential to note that recipients must undertake the registration process, which could involve additional steps. Nevertheless, once this step is completed, the service promises to revolutionize money transfers within the Czech Republic, ushering in a new era of convenience and efficiency.

Article by Prague Forum