Czech Banks Introduce Mobile Payments

The first banks in the Czech Republic are set to launch a new feature called “payments on contact” by mid-November. This means that when someone wants to send money to another person without knowing their bank account number, they can use the recipient’s mobile phone number instead. Transactions of up to five thousand Czech koruna will be possible using this method.

Raiffeisenbank, Komerční banka, Česká spořitelna, and ČSOB have all confirmed their plans to introduce these payments. Other banks, such as Moneta Money Bank, are also preparing for the launch, albeit with a later timeframe.

Although the banks have not disclosed the date, it will likely be around November 14th, when the Czech Banking Association will hold a press conference.

“This is another simplification for people, especially when they want to quickly and conveniently send smaller amounts of money to each other. While few people can remember their bank account number by heart, almost everyone remembers their mobile number,” commented Jana Pokorná, spokesperson for Air Bank.

To facilitate payments to mobile numbers, a central register of account numbers and associated mobile phones will be operated by the Czech National Bank. Clients of participating banks will be able to receive payments on contact by actively registering their mobile phone number with their bank and linking it to their bank account number.

If a person has multiple bank accounts associated with their phone number, they must choose which account to use for receiving payments on contact during the registration process. However, linking various phone numbers to a single bank account is also possible, for example, when spouses share an account but have separate mobile phones.

Individuals do not need to contact the central bank for registration to receive payments on contact. Financial institutions where they hold their accounts will handle the registration process.

“Registration for the service will be possible through mobile and internet banking. By verifying a one-time code sent to the registered phone number, we will ensure that the client has possession of the phone,” explained Šárka Nevoralová from Komerční banka.

Phone numbers not included in the Czech National Bank registry will not be able to receive payments on contact.

The system will also allow individuals not registered in the central bank’s database to send money to mobile numbers from their banking applications.

“For example, if you want to send a certain amount of money to a known contact, you will enter their mobile phone number during the payment process in your mobile banking application,” said Zuzana Filipová from Moneta Money Bank.

The system will then instantly verify whether the entered number is registered in the Czech National Bank registry and under what name. If the verification is successful, the payment to the contact will be allowed to proceed.

Before confirming the transaction, the sender will see the name of the phone number’s owner to avoid any mistakes.

With the introduction of payments on contact, Czech banks aim to offer a more convenient and efficient way for people to transfer money, especially for smaller transactions. This innovation leverages the ubiquity of mobile phones and eliminates the need to remember or share bank account numbers, making peer-to-peer payments quicker and hassle-free.