Central Bank has proposed to create a universal payment address to get rid of large requisites
The Central Bank has proposed the best option for a client to transfer from one bank to another. The country’s main regulator plans to create a universal payment address instead of cumbersome details. Thanks to this solution it will be possible to transfer funds to an account in a new bank without additional operations.
The Central Bank of Russia announced these plans during the discussion of the strategy for the development of the national payment system, which is designed for the years 2021-2023. Now the regulator is considering the possibility of introducing the automatic transfer to another financial institution. According to the authors of the universal payment address, the system will enhance competition between banks and diversity of services provided to clients. For the time being the project is under development and there is no detailed information about technical details.
Besides that, the strategy announced by the Central Bank implies reducing the cost of services for individuals and legal entities. Besides, the regulator wants to stimulate banks for further development and increase the audience of their clients. 
On the Russian market, the largest financial institution is Sberbank. It holds a share of 65% of the total number of serviced accounts and payments of the population. This bank also holds 70% of the payment card issuing market. This situation has a risk of becoming a limiting factor for clients in choosing services of financial institutions. Other banks can not withstand the competition and close some of the programs, which are inferior to the conditions in Sberbank.
The complicated procedure of changing a financial institution often leads to monopolization. Despite the attractive services of another bank, the client refuses to serve in it, avoiding the waste of time and effort for a long transfer of accounts. According to consumer surveys, the most frequent problems arise when transferring auto-payments, setting up online banking, and collecting the documents needed to close an account at one bank and open one at another.
The Central Bank said that reviewing the rules for transferring customers to a new financial institution is not an acute problem, but it will become more relevant in the future. At the moment many consumers prefer to use the services of several banks simultaneously. In addition, they have the opportunity to transfer funds by phone number. The turning point for the need to introduce a universal payment address may be an increase in the price of the banks’ services fees. Then customers will begin to move to other financial institutions.
According to experts, this mechanism is more relevant for entrepreneurs where the change of bank details is associated with a large amount of paperwork. Therefore, it is already worth thinking about exploring various transition mechanisms in order to avoid mistakes and reduce the burden on the banking system in the future.
