Czech Banking Association launches Contact Payments

Six banks have announced the launch of Contact Payments (Platby na kontakt), an initiative developed and supported by the Czech Banking Association, which hopes it will make it easier to send money between people.

CBA launches Contact Payments

Instead of the account number in internet or mobile banking, customers will just enter the mobile phone number of the recipient of the payment, facilitating domestic transactions between individuals.

Clients must actively log into the service and pair their phone number with their bank account. The maximum amount of payment at the launch will be  5,000 crowns (ca. €200).

The register of numbers and the technology for the new Contact Payment system is to be operated by the Czech National Bank (CNB).

The  service will be launched by six banks: Air Bank, Česká spořitelna, ČSOB, Fio banka, Komerční banka and Raiffeisenbank. Moneta and UniCredit Bank will launch the service next year.

“The service is for all natural persons or self-employed persons who actively sign up for the new service. We are thus bringing further simplification when sending money between people,” commented Monika Zahálková, executive director of the Czech Banking Association.

Most bank clients prefer to pay by mobile phone number mainly because it is easier and faster to fill out. Some of them also find it easier to find a mobile phone number.

Why Contact Payments?

According to a survey by Ipsos for the Czech Banking Association, more than 40% of the respondents would use Contact Payment would prefer to use the system for payments under 5,000 crowns.

The system is also intended to reduce the risk of mistakes when entering the wrong account number of the recipient. Almost 40% of people have the experience of confusing their bank account number.

“In the register operated by the CNB, it is possible to store multiple telephone numbers for one account number, for example in the case of a joint account of spouses,” explains Jan Schmidt, director of the risk management and business support section of the CNB.

“Conversely, multiple account numbers cannot be assigned to one phone number. Payment to the contact can only be entered in Czech crowns. The maximum limit of one payment is 5,000 crowns, the minimum amount is one crown.”

Telephone numbers not included in the CNB register will not be able to accept Contact Payments. So the money will not leave the account. Before sending the payment, the name of the recipient’s account is displayed, usually first and last name.

In recent years, banks have seen a sharp increase in clients using mobile banking. From the beginning of 2019 to the middle of this year, their average number increased by 110%.

The maximum amount is limited to five thousand crowns, for security reasons. However, it is not excluded that the amount could increase in the future.