Pay-by-proxy is becoming increasingly popular due to the security and convenience it provides to payers.
In this approach, an alias such as a national identifier/email id linked to the customer’s account information, is sufficient to make payments. Payers need not enter the payee bank account details to make a payment, thus simplifying the payment initiation process and reducing the potential for erroneous payments to a different bank account number. Pay-by-proxy is not only a convenient way of making payments but also protects the privacy of customers in terms of ensuring that critical bank account information is not exposed to the external world externally.
Individuals can request or send money without having to share their bank account details. Payments could be made to a mobile number as a proxy which would help derive the linked bank account(s).
In many cases, digital payments are still not inclusive, as they require payers to enter complicated bank account information which is tedious and a friction point that can discourage people from using them.
The need to know the banking details of the beneficiary is not only inconvenient but also a security risk.