The exchange of money with payment proxy identifiers

Proxy identifiers

Since a few years ago proxy identifiers are an integral part of the payments landscape in some countries and their use will soon become widespread in the European continent. Several European domestic payment schemes such as SEPA, SEPA Instant, or Hungarian Domestic Instant, have already published secondary identifiers rulebooks whose main features we describe in this post.

European schemes overview

For the purposes of illustrating design principles and main functionalities of proxy identifiers schemes, we will make reference to documents publicly available, EPC250–18 v1.0 of the SEPA proxy look-up scheme rulebook, the TARGET Instant Payments Settlement Mobile Proxy Look-up Service, and the Hungarian Proxy Identifiers Scheme Rulebook v2.1.

Fig.1 Hungarian domestic scheme for proxies.
  • Enquiry: returns all proxy identifiers linked to a particular IBAN
  • Look-up: returns the matching IBAN for a given proxy identifier
  • Delete: removes the link between an IBAN and a proxy identifier
Fig.2 SEPA Proxy Look-Up scheme
  • RRPs: these will verify incoming calls are authorized and will respond with a proxy linked beneficiary IBAN in real time. They will also hold responsibility for ensuring accuracy and maintaining an updated version of the registry.
  • SPL: this service bears responsibility for authentication, routing to RRPs, and validation of RRPs responses. It also stores a trail of processed queries for audit purposes. The service searches for primary identifiers across all RRPs following a sequencing order, should these not be found in a local RRP in the first place.
Fig. 3 SEPA Instant TIPS Proxy Look-Up scheme.
  • MLP: the look-up service returns beneficiary / creditor side IBAN along with additional data upon calling the service such as the Bank Identifier Code.
  • Enquiry — (this is referred in rulebook as reachability request)
  • Look-up
  • Access rights management
  • Tools to manage contingency scenarii

A few closing thoughts

After briefly reviewing these three schemes a conclusion has quickly emerged: they offer the same sort of functions minding a few specifics by scheme. Going forward they are meant to evolve towards the same extended offer with the inclusion of additional proxy types further to mobile phone numbers.

Technology consultant — banking