ECB plan to enable money transfer via email address or mobile phone number

What could possibly go wrong?

The European Central Bank (ECB) is planning to enable consumers to transfer money using phone numbers or email addresses, rather than by bank account numbers, according to ECB executive board member Yves Mersch

In an interview with RTL Nieuws on Monday, Mersch said the system would enable a consumer to link their mobile phone number or email addresses to their International Bank Account Number (IBAN).

"To send payment over your telephone from one country to another, you go onto your contact list, you take the name of a person, and you would immediately also get his IBAN", Mersch told the Dutch television station.

According to Reuters, the ECB recently established a steering committee with major European banks to work on the plan. However, Mersch added that it was not clear when the system would be ready, although a schedule should be put in place by the end of summer.

The chief obstacles to the idea are legal, not technical, he told RTL Nieuws.

Using mobile phones to enable funds transfer is not new. When M-Pesa was launched in 2007 in Kenya and Tanzania it proved to be a huge success. The system enabled people in Kenya the African countries without a bank account or even, in some cases, access to a bank, to transfer funds across their respective countries.

The service enables users to deposit money into an account that is stored on their mobile phone, rather than a bank. They can then send money using a PIN-secured text message to other users, including sellers of goods and services, and to redeem deposits for regular money. Users are charged a fee for sending and withdrawing money using the service, which is overseen by their mobile operator.

The M-Pesa scheme has since been expanded to Afghanistan, South Africa, India and even Eastern Europe.