Fourteen banks, which for now have not been specified, will begin next Monday, June 24, to carry out the new transfer service managed by the Bank of Portugal. But in mid-September all banks must provide access to this service that the financial supervisor called SPINwhich allows you to transfer money using (the recipient’s) mobile phone number instead of using IBAN codes. How is the new service different from transfers made through MBWay?a service that is already widely implemented in Portugal?

oh SPIN – noun that is a contraction of yessure, PRatic and INovador – is launched a few weeks after another major change emerged in bank transfers in Portugal, the possibility of identify the recipient of a transfer us Banking Home and in Applications of the banks. The appearance of the name of the person associated with the account to which the money is transferred was already something that occurred in most ATMs (that is, Multibanco ATMs, managed by SIBS), but this also began to exist on other channels such as bank websites and the Applications.

Now, starting from the identification of the recipients before the transfer is approved, the new service of the Bank of Portugal allows Find a recipient in your contact list (mobile phone numbers) and make the transfer without having to enter the 21-digit IBAN – It is as if mobile phone numbers function as a “shortcut” to the IBAN. Furthermore, the operation is a normal (or immediate) transfer as it existed until now.

SPIN is free and more “universal and comprehensive” than “private label” solutions

The need to enter long IBAN numbers to transfer money to someone was one of the factors that helped implement other solutions on the market, including the most used of all, the service MBWay. MBWay, which only requires your cell phone number to send money to someone else, is run by SIBS, a private company.

And this is the first major fundamental difference between the two services: SPIN is an evolution of bank transfers that have always been made available by the Bank of Portugal, a public body, while MBWay is a product associated with a private label. which is SIBS, creator of the Multibanco network and which has commercial banks as shareholders.

MBWay, according to SIBS, already has 5.6 million users who use this application not only to make transfers but also to make payments for purchases and withdrawals without having to use bank cards. However, while MBWay has caused many people to bank while leaving the card at home, the service essentially It is card based (from Portuguese banks) and not in bank accounts.

This means, from the beginning, that the Bank cards involve the payment of annual fees. which vary from bank to bank, and between different types of cards, while the accounts may have associated maintenance costs but there is always the possibility of having free accounts with minimal banking services. For this reason, at a press conference this Friday in Lisbon, administrator Hélder Rosalino assured that, when it comes to transfers, SPIN is the service more “universal and complete” that is available to people.

THE TURN “It is a public service solution“, he stressed, so banks cannot charge any additional costs.

However, trying to anticipate this announcement from the Bank of Portugal, SIBS indicated on Thursday, in a press release, that MBWay would also allow the identification and (prior) confirmation of the recipients of the transfers, which represents an opportunity for the service. loaned by MBWay will also be linked to accounts and not just cards.

The Bank of Portugal says it is “concerned” about the increase in fraud levels

Hélder Rosalino highlighted that the intention of the Bank of Portugal, by making these services available, “does not compete with any of the solutions that already exist in the private market”, and, when asked why the supervisor is now launching this service, the first reason given by the person in charge was his “concern” about security issues and fraud prevention.

The administrator of the Bank of Portugal, responsible for payments, did not mention it explicitly, but implied that, in his opinion, the solutions existing so far do not offer sufficient guarantees to prevent fraud, which is “a drama and is something that creates social alarm.”

“In the area of ​​the payment systems forum, where more than 50 entities are located, from banks, large distribution companies, companies from various sectors, various public organizations, They asked us to develop new platforms”to increase the security of payments and transfers, Rosalino revealed.

Transfers? You won’t need the IBAN, just the mobile number (and you will never be wrong about the recipient again)

“The issue of fraud is an issue that worries us,” said Hélder Rosalino, indicating that in the last two years the fraud rate (in transfers) doubled from 0.0003% to 0.0006%.

With SPIN, the person in charge assured, “Social engineering ‘Hello Dad’ either ‘Hi Mom’ are clearly reduced in the possibility of success because if I think I am transferring it to my son and his name does not appear, then I have doubts and I will not make the transfer.”

Hello Dad. Hi Mom. How did it work and how was the fraud scheme that diverted thousands of euros from the Portuguese accounts dismantled?

“These features are not intended to change the way the market works, nor compete with solution A, B or C, it is available in all banks in all channels. This universalizes two essential functionalities: confirming the beneficiary and reducing the difficulty of identifying the beneficiary,” stated the administrator of the Bank of Portugal.

Asked about the launch of SPIN and the concerns expressed, in general, by Hélder Rosalino, an official SIBS source declined to comment.

A service “with no limit on the number of transfers, unlike other solutions”

Hélder Rosalino highlighted another fundamental difference between SPIN and transfers via MBWay, which is that it is a “there are no limits on the number of transfers, which contrasts with other solutions“.

In the page Web of SIBS, the current limits on the use of the service, whether to receive or send money, through MBWay, are defined. There is a maximum limit of 750 euros per operationanother limit 2,500 euros maximum received and sent per monthand also a maximum limit of 50 transfers received per month.

oh SPIN, on the other hand, will have no limits different from those defined individually by the banks, for each client. That is, it is common for banks to have limits that require, for example, that someone who wants to make a transfer of 5,000 or 10,000 euros must contact the bank in advance, to guarantee that the transfer is made safely.

As SPIN, which is nothing more than the usual transfers that are a little easier (because the IBAN is dispensed with), the limits that exist will vary from bank to bank and from client to client, but they do not change.

Another possibility that SPIN brings, said the Bank of Portugal, is the possibility of making transfers to companies (and not only for individuals) using the Corporate Identification Number (NIPC). The service also allows you to obtain information about the recipient’s name in advance, to ensure that the money is not transferred to the wrong company.

SPIN may not have (immediate) notification for those receiving the money

Each person will have to authorize their cell phone number to be associated with a bank account where they can receive money from other people. This means that when each bank implements this solution, a message will appear on the bank’s website (or application) in which the customer is asked if they authorize this account to be associated with a specific mobile phone number.

Several people can associate the same account with several mobile phone numbers (which is useful, for example, in joint accounts between couples). However, each mobile phone number can only be associated with one account, which means that if you accept the association of an account with a mobile phone number and then accept the association of the same number in another account, the latter association will replace the previous one. first. .

Furthermore, explained Hélder Rosalino, Use of the SPIN service does not require any membership, or application own (as is the case of application from MBWay). In simple terms, for someone to receive money through SPIN they need to register (because it involves associating a mobile phone number with the account), but to transfer money to someone who uses this service you do not need to register.

However, this is where there may be a limitation of the SPIN service, compared to MBWay, and that is linked to the difference between so-called normal transfers and the Immediate transfers. For the first time, banks cannot charge fees, but normally the transferred money does not reach the recipient’s account until the next day. On the other hand, most banks still charge fees for immediate transfers, which, as a rule, are around 1.5 euros.

Bank transfers will be immediate (and banks will not be able to charge for it)

Hélder Rosalino indicated that Immediate transfers “will become the new normal”starting early next year, because banks will be prohibited from charging more for immediate transfers than they charge for normal transfers.

However, until this change occurs, most people who want to transfer small amounts will continue to prefer normal transfers (which take a day) over immediate transfers (which are still charged). Thus, the transferred amounts will only arrive the next day and whoever receives the money may not have immediate guarantee that the amount was actually transferred.

While this factor will not be a major impediment between people who know and trust each other, in other cases it can be a limitation. For example, someone who sells a used item to a stranger and receives the money through MBWay may be accustomed to confirming, on her own mobile phone, that the money has already entered her account. With SPIN, unless the person sending the money opts for immediate transfers (and pays the fee that, for now, remains associated), the person receiving the money may not have such an easy way to guarantee that they will actually receive the money .

This “peche” may be less important starting next year, with immediate and free transfers, but for now it could be an obstacle to more widespread adoption of SPIN. Questioned by the Observer at the press conference, Hélder Rosalino explained that It will be up to the banks to create solutions so that there can be immediate notifications on the mobile phone of the person receiving the money, since the Bank of Portugal “cannot go as far” as to get the banks to create these functions.