Dec 29, 2020
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What is a universal billing address?

The Bank of Russia may develop a “universal payment address” mechanism. It will allow customers of credit institutions to automatically receive money in the event of a change in bank accounts. The innovation should simplify the process of changing banks.

The new mechanism will be launched if it is in demand on the market, according to the draft strategy for the development of the National Payment System for 2021–2023, which RBC refers to.

What is the essence of a “universal billing address”?

The new mechanism will make it faster and easier to move from one bank to another. With its help, the money that will be transferred to a person will not be lost, but will automatically go to new bank details.

It is expected that the availability of “mechanisms for a simplified and barrier-free change by a consumer of a servicing bank” will facilitate the development of competition in the market.

The technical details of the mechanism have not yet been specified. It is also unknown whether the introduction of a “universal billing address” will lead to the cancellation of the use of other bank details.

Why is a new mechanism needed?

Today, over 65% of all bank accounts and payments of Russians, as well as over 70% of the market for issuing and servicing payment cards, are accounted for by one of the country’s largest banks. The Central Bank believes that the current situation may lead to limitation of customers in the use of products and services of other credit institutions, which become economically unprofitable compared to the products of the largest market player.

According to experts interviewed by RBC, so far Russians do not have an urgent need for a new mechanism. They explain this by the fact that many use several banks at once and rarely leave one of them completely. In addition, individuals do not have a massive receipt of payments to the account, as a rule, this is only a salary or pension.

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