Czech banks will soon support money transfer via a mobile number

It's hoped the system, set to launch in pilot phase this summer, will cut back errors and make peer-to-peer transfers faster and easier.

Expats.cz Staff

Written by Expats.cz Staff Published on 31.05.2022 11:15:00 (updated on 31.05.2022) Reading time: 2 minutes

Sending money within the Czech Republic is about to get easier. The Czech National Bank has announced that it'll soon be possible to transfer funds from one bank account to another via the recipient's mobile phone, with no account number required.

The payment-on-contact system, called platby na kontakt in Czech, is based on a register of bank accounts that are paired with an individual user's phone number. The sender's bank will contact the registry once payment has been initiated and use the recipient's phone number to complete the transfer.

The Czech National Bank, which will maintain the register and provide banks with the relevant account information needed to complete transactions, said nine banks have signed on to the project. Customers from these banks can opt to link their telephone and account numbers to use the service.

Similar innovations, already in use in the U.S. and elsewhere abroad, make peer-to-peer transactions easier, allowing you to split a dinner bill without needing to exchange cash or pay for items purchased in online marketplaces without a bank transfer.

ČNB board member Oldřich Dědek, who oversees risk management and business support, said testing is set to launch this summer. If the pilot phase is successful, the service should be available from the beginning of the new year.

“We are starting with mobile numbers, but in the future, the system could be expanded to include other possible contacts for matching with the account number, such as email addresses," Dědek said.

The Czech Banking Association (ČBA) expects the payment-on-contact system to reduce errors that occur when customers manually enter account numbers, which can lead to money being sent to the wrong person's account.

FEATURED EMPLOYERS

“In addition to greater convenience for clients, we expect fewer such mistakes and further acceleration of the payment process,” ČBA transaction expert Tomáš Hládek said.

Another innovation introduced by Czech banks in recent years includes instant payments, which first appeared on the market in 2018 and are currently offered by 13 banks. Money can be transferred 24/7 between any account in seconds eliminating the delay between entering and crediting the payment. One out of five bank transactions in the Czech Republic is now in instant payment mode.

Experts say traditional Czech banks are updating their services in an effort to stay competitive with the emerging fintech sector.

Would you like us to write about your business? Find out more