General

Turkey’s Central Bank unveils FAST, send money 24/7 in seconds using Telephone, ID or Bank number

The Central Bank has completed its preparations to launch a new payment system. With this new system called Instant and Continuous Transfer of Funds (FAST System), citizens will be able to make money transfers between their accounts in different banks within seconds, 7 days 24 hours.

The FAST System will be put into service as a pilot application as of December 18 and will be gradually opened to the use of citizens. The FAST System will complete retail payments from one bank account to another in second; thus, will bring important innovations in the lives of citizens.

With the implementation of the system, individuals and businesses will be able to transfer money between accounts in different banks 24/7 at any time of the day. The transferred fund will become available in the buyer’s account within seconds from the initiation of the payment transaction and the parties of the transaction will be informed about the result of the transaction by their banks.

With the FAST System, the Easy Addressing System (KOLAS), which enables payments to be initiated using information such as phone number, identity number or e-mail address instead of IBAN, will also be available to citizens. With KOLAS, customers of FAST participants will be able to match their mobile phone numbers, e-mail addresses or their Turkish Republic ID number with their accounts (IBAN) from which they want to receive payment. In this way, the sender will be able to initiate the payment quickly and easily without the need to enter the recipient’s bank, account number and name. In addition, it will be possible to make payments between individuals and commercial enterprises with a square code.

The FAST System, which will enable easy and fast payments between individuals and businesses 24/7, will play an important role in the transition to a society that uses less cash and in the digitalization of the economy.

The differences of FAST system from EFT system

Although money transfers between the accounts in banks with the EFT System take place within seconds, the banks do not have a time commitment to make the money available to the recipient’s account. For this reason, the reflection of the payments on the accounts can take longer. In addition, the EFT system works only during working hours.

There is no obligation to notify the receiver and the sender after the EFT transaction. In the FAST system, there is a notification requirement.

Instant payment systems around the world

It is seen that systems like FAST, which are recently classified as instant payment systems, are becoming widespread. Instant payment systems have been widely used for a long time, especially in countries such as the UK, China and India.

Since 2018, new systems have been put into use in countries such as Australia, Russia, Serbia, Hungary, Malaysia and in the European Union. The American Central Bank has also started to investigate such a system.

Non-bank organizations will also participate in the FAST System

FAST system in the first phase will be commissioned with the participation of banks in Turkey wanting to get involved in the system. Integration with 21 banks has already been achieved.

Although the number of banks traded in the system is expected to increase in the future, non-bank institutions that will meet the criteria to be determined in the system will also be able to participate in the system.

In line with the strategy of widespread use of the FAST System, the Central Bank of Turkey (CBRT) will not charge banks for messages. The evaluations of the fees that banks will collect from their customers are continued by the CBRT. In the FAST System, an end-to-end money transfer transaction between participants is aimed to be completed in an average of 2-3 seconds, while transactions that are not completed within 25 seconds will be cancelled.

FAST System will support TR Data Matrix

FAST System will support TR Data Matrix, which is the national data matrix standard for payments. Accordingly, information on FAST payments will be shared within a standard very quickly, easily and without error, thus speeding up payment transactions. Customers will be able to pay quickly and easily by scanning the QR code shown by the merchant when purchasing goods and services in shopping transactions.

FAST, which will provide a fast-contactless payment service with the QR code, will take place in users’ lives as an alternative to cash and card payments.

Money transfers to mobile phones will be available via FAST System

Money can be sent to your mobile phone via FAST. Apart from FAST, a system has also been developed in which account numbers, phone numbers, Turkish ID numbers or e-mail addresses can be matched. Customers will be able to send payments to the phone number, ID Number or e-mail address registered in the system instead of the account numbers (IBAN) and name information of the businesses and individuals they want to send money to via mobile banking / internet applications.

This infrastructure, called the Easy Addressing System, was also prepared to support this workflow. Citizens will start to match their account numbers with their phone numbers, Turkish ID Number, or e-mail addresses through their banks in a short time. However, the implementation of payment with easy addresses will start after the FAST System is activated.

During the transition period when the system was put into service as a pilot on December 18, as planned, the upper limit of the transaction is planned to be started with a low amount and gradually increased to ₺1000.

In addition, banks will be able to set a lower amount and daily total transfer limit to their customers within the framework of their risk profiles. The main reasons to start with a low amount limit are to assist banks in their out-of-hours liquidity management and to monitor fraud trends that can target customers. Increasing the transaction upper limit to ₺1000 in the upcoming periods will also be evaluated.

Use of the system by citizens and businesses

It will be sufficient for citizens and businesses to have an account in any bank participating in the FAST System. In addition, it will be necessary to register the phone number in the Easy Addressing System through the bank and match it with the bank account in order to receive money for the phone number.

On the other hand, businesses will be able to accept instant payments at their workplaces using QR codes. Individual and commercial payments can be made via FAST. It is aimed to spread individual payments and shopping payments made by TR Data Matrix and Request to Pay (R2P) via KOLAS to be commissioned. In the long run, all retail payments in the EFT system will be evaluated to shift to FAST.

source: AA / translated by Melisa Karayusufoglu

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