EXPLAINED: How to transfer money via mobile number in Czechia

This week saw the Czech Republic take a big digital leap forward with the launch of a new banking service that is designed to make peer-to-peer transactions like splitting a dinner bill or buying something from an online marketplace easier.

Czechia is transforming its mobile banking system to allow money transfers using only phone numbers. Major banks have launched a new "payment to contact" (Platba na kontact) project to streamline the process.

Six major Czech banks – Air Bank, Česká spořitelna, ČSOB, Fio Banka, Komerční Banka, and Raiffeisenbank – have joined the project run by the Czech National Bank (ČNB). Moneta Money Bank and UniCredit are set to join in 2024.

The system eliminates the need for bank account details when sending money. A mobile phone number is sufficient.

To use it, consumers register their phone number with a specific bank account. The ČNB database then connects each phone number to the associated account. This allows people to instantly receive funds without others knowing their account information.

When sending money via phone number alone, the ČNB identifies the matching account. For validation, the sender's bank displays the recipient's name.

Only the recipient needs to register their phone number, which they can provide to those wishing to send funds. The process is straightforward:

For security reasons, transfers using phone numbers are currently capped at CZK 5,000. However, there is no limit on the number of transfers. The ČNB recognizes the potential to raise this ceiling in the future as the system matures.

If no funds are received via the phone-based method for six months, the registration will be deactivated. Account holders must then re-register their mobile numbers.

According to the Czech Banking Association (CBA), the main goal is to streamline transfers by enabling payments solely by phone number. This significantly reduces mistakes from incorrectly entered account numbers – an issue impacting 40 percent of Czech transferors. Phone numbers are also easier to remember than long account strings.

The CBA stresses this option supplements, rather than replaces, traditional online and branch-based transfers. Participation is optional for customers and banks.

A CBA survey found nearly two-thirds of Czech account holders open to the new payment method. Proactive registration will determine success, says Česká spořitelna spokesperson Filip Hrubý. Several banks have pioneered similar services.

This innovation aims to modernize Czech banking through simplicity, convenience, and ease of use – benefiting consumers across the nation. Streamlined access promises to transform the customer experience.