A few weeks ago the Central Bank of Malta (CBM) proposed plans to introduce a national mobile proxy look-up system – a national mobile payment platform that would let people send money using familiar details, like a mobile number, instead of bank account information.

The move, inspired by systems like Revolut’s, would mark a major step forward in making interbank payments faster, simpler and more accessible to all account holders. It could also help local banks protect market share that they may have been losing to digital challengers.

Banking sector largely welcomes innovation

Several Maltese banks have voiced support for the proposal, acknowledging its potential to enhance convenience and user experience.

APS Bank described the initiative as “more practical and user-friendly” and praised its ability to reduce input errors while simplifying instant payments. However, the bank stressed the importance of the system supporting multiple accounts per customer across different banks.

“It is important that the system also supports multiple accounts per customer across local banks, either by allowing the use of additional aliases (such as email address or ID number) or by prompting the user to select their preferred account in real time,” an APS spokesperson continued.

BNF Bank also welcomed the proposal as “a positive step towards greater convenience, interoperability, and innovation in payments.”

HSBC Malta echoed a positive stance, viewing the initiative as “a positive step toward a more efficient, inclusive, and accessible payments ecosystem.”

MeDirect similarly welcomed the CBM’s initiative, noting that the proposal aligns Malta with broader European trends in digital payments, and highlighting that several jurisdictions have already implemented such proxy-based solutions.

“It is also worth noting that several local and foreign institutions already offer proxy-based services within their own ecosystems. A national framework would help unify these efforts, improve interoperability, and promote financial inclusion across Malta. We look forward to engaging with the Central Bank of Malta and other stakeholders to ensure the solution is secure, user-friendly, and aligned with European standards,” MeDirect said.

Cautious approach from Bank of Valletta

Bank of Valletta (BOV), however, expressed reservations. While noting that existing solutions such as mobile-to-mobile payments (between customers of the same bank) and SEPA Instant Payments already provide customers with multiple digital payment options, BOV questioned what unique advantage the proposed proxy system would add.

“The market already offers numerous payment solutions, such as Mobile to Mobile Payments and SEPA payments, including instant payments,” a spokesperson said.

“It is essential to understand the unique value proposition that this mobile proxy system will bring, especially considering the ongoing digital euro initiative,” they said.

Technological readiness and security concerns

Banks generally affirm their technological preparedness for integration.

“APS Bank already has the Pay-to-Mobile (P2M) functionality on myAPS, providing customers with the capability to initiate instant payments to other APS customers using mobile numbers,” APS said.

“APS Bank can continue developing myAPS to support such a feature and already has the necessary orchestration tools to enable the integration with the proposed look-up system,” it continued.

BNF cited recent digital transformation efforts positioning it well to support new infrastructure.

“Our systems have been upgraded to support interoperability and scalability, enabling us to connect with emerging technologies and platforms,” BNF said.

At the same time, banks acknowledge challenges related to security and fraud prevention.

“The immediacy of fund transfers increases the risk of fraud, making strong real-time authentication essential to prevent unauthorised transactions. Even with proxy look-up systems or Verification of Payee (VOP), inaccurate beneficiary data could lead to misdirected payments, so maintaining up-to-date and accurate registries is critical,” it said.

“Additionally, instant payment systems are prime targets for cyberattacks, including phishing, malware, and DDoS incidents. Continuous security monitoring, threat mitigation, and timely patching are therefore essential. Finally, because customers have little time to correct errors, customer awareness and effective error-handling mechanisms are vital to ensure a safe and trustworthy payment experience,” it continued.

MeDirect also emphasised its readiness as well, highlighting significant investments in modernising payments.

“We also maintain robust data governance and cybersecurity protocols to ensure compliance with GDPR and other regulatory standards,” MeDirect continued, adding that integration would happen quickly “with clear specifications and collaboration across the industry.”

The path forward

The CBM is currently soliciting feedback from banks, businesses, and the public to refine the system’s design and ensure broad adoption.

APS Bank advised the Central Bank to prioritise clear governance frameworks, user-centric design that supports multiple aliases and accounts, strong security measures, interoperability standards, and customer education campaigns.

BOV said it is “confident that this initiative will be advanced through the same spirit of cooperation,” referring to the “highly-collaborative” relationship between the Central Bank and local banks.

The success of Malta’s national mobile proxy system will hinge on balancing innovation with practicality, security, and customer trust. Malta’s banking sector is preparing for a significant shift in how payments are made, potentially making mobile numbers the new cornerstone of digital financial transactions.