Czech Banks to Introduce “Payments on Contact” via Mobile Numbers for Peer-to-Peer Transactions

In a significant move aimed at enhancing the convenience of financial transactions, several major banks in the Czech Republic are preparing to launch a new feature known as “payments on contact.” This innovative solution allows individuals to send money to others using their mobile phone numbers rather than traditional bank account numbers. This feature is set to become available by mid-November, enabling transactions of up to five thousand Czech koruna through this method.

Prominent financial institutions like Raiffeisenbank, Komerční banka, Česká spořitelna, and ČSOB have all confirmed their intentions to introduce these payments. Additional banks, including Moneta Money Bank, are also gearing up for the launch, although they may have slightly different timelines.

While the specific launch date hasn’t been disclosed, it is expected to be around November 14th, coinciding with a press conference hosted by the Czech Banking Association.

The introduction of “payments on contact” is poised to simplify the process of sending smaller sums of money swiftly and efficiently between individuals. It’s an acknowledgment that while few individuals can recall their bank account numbers from memory, almost everyone can readily recall their mobile phone numbers.

To facilitate payments via mobile numbers, the Czech National Bank will oversee a central register of account numbers linked to mobile phones. Clients of participating banks will be able to receive payments on contact by actively registering their mobile phone numbers and associating them with their respective bank account numbers.

In cases where individuals have multiple bank accounts associated with their phone number, they must specify the account to use for receiving payments on contact during the registration process. Additionally, the option to link multiple phone numbers to a single bank account is available, making it convenient for couples or shared accounts with separate mobile phones.

Individuals do not need to engage directly with the central bank for registration to receive payments on contact. The registration process will be managed by the financial institutions where their accounts are held, ensuring a seamless experience for customers.

The registration process can be initiated through mobile and internet banking applications. A one-time verification code sent to the registered phone number will confirm the client’s possession of the phone, thereby enhancing security.

Phone numbers not included in the Czech National Bank’s registry will be unable to receive payments on contact. However, the system will also enable individuals not registered in the central bank’s database to send money to mobile numbers directly from their banking applications.

When initiating a transaction, the sender will enter the recipient’s mobile phone number during the payment process in their mobile banking application. The system will swiftly verify whether the entered number is registered in the Czech National Bank’s registry and under what name. Successful verification will permit the payment to proceed, with the sender seeing the name of the phone number’s owner before confirming the transaction.

The introduction of “payments on contact” by Czech banks represents a commitment to providing a more convenient and efficient way for people to transfer money, particularly for smaller transactions. This innovation capitalizes on the ubiquity of mobile phones and eliminates the need to remember or share bank account numbers, streamlining peer-to-peer payments to be quicker and hassle-free.

Article by Prague Forum

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