Proxy payment makes payments faster

Four years ago, a proxy payment solution arrived in the mobile app of all major banks in Estonia, which allows payments to be made only on the basis of the recipient’s phone number. Today, according to Eesti Pank, it already has more than 350 thousand users.

You know the tedious journey of having to make a quick payment to a friend, but you do not know their account number. When the friend finally sends the account number, it still needs to be transported to the payment order using the copy-paste method.

Therefore, banks have a common proxy payment solution, using which it is enough to know the recipient’s phone number instead of a long account number. The prerequisite is that both the recipient and the sender have subscribed to the proxy payment service. Once the selected recipient has linked their phone number to the proxy payment solution, the payment order will be automatically filled in with the necessary data and all you have to do is confirm the payment.

To use a proxy payment, you must first link your phone number to a suitable account number in the bank’s mobile app. To link a phone number to a bank account for the first time, you must have physical access to the number to confirm the verification code that arrives via SMS. This proves that the phone number you entered still belongs to you.

You then have to give the app access to your phone book. Access is necessary so that when making a payment, you can already find the recipient among your contacts in the LHV mobile app.

If it turns out that the recipient of the selected payment has not yet subscribed to the proxy payment service, you can send them an invitation to join the proxy payment service in the LHV mobile app.

When possible, the proxy payments will always be processed as instant payments and the money will be transferred to the recipient’s account within seconds. Both individuals and legal entities can subscribe to the service, but it is important to know that one number cannot be associated with several bank accounts. If you have activated the proxy payment service in several banks or with several accounts, the most recently linked account remains valid.

Why subscribe to the proxy payment service anyway? The keyword is comfort. If the people in your phone book have subscribed to the service, you can quickly make transfers based on the phone number, if necessary, without asking for and copying the account number. After all, one does not know in advance to which friend the need to make a transfer may arise, and it is extremely convenient if only a phone number is enough to make it.

The proxy payment service was created in cooperation with the Central Bank of Latvia, which securely manages the register of phone and account numbers of both Estonian and Latvian clients. In Estonia, in addition to LHV, Swedbank, SEB, Citadele, and Coop Pank have joined the service.