Eight of the UK’s biggest banks – comprising 90pc of UK current accounts – have committed to launching new mobile payment services that allow consumers to transfer cash to one another in a way that’s as simple as sending a text message.
The UK Payments Council’s new mobile service will enable secure payments to be made directly to or from an account without the need to disclose the sort code or account number, by simply using a mobile phone number as a proxy.
Eight financial institutions comprising Barclays, Cumberland Building Society, Danske Bank, HSBC Bank, Lloyds Banking Group, Metro Bank plc, Royal Bank of Scotland and Santander UK plc – have committed to launching the service by March 2014.
The new mechanism for sending money via mobile devices may be one of the few areas where the Irish banking system is already leading the charge.
Bank of Ireland launched its mobile money transfer service that allows customers to simply send cash by using their mobile phone numbers in December.
Shaping the future of money
“The mobile payments project is a fantastic example of the unique role the Payments Council can play in delivering far-reaching, innovative improvements for customers,” said Adrian Kamellard, chief executive of the Payments Council.
“This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details.”
More than 5,000 consumers participated in Payments Council research, which revealed the service is likely to prove most popular with smartphone users, who accounted for two-thirds (67pc) of those surveyed. One in three smartphone users said they were either definitely or extremely likely to sign up to the new service at launch.
The Payments Council service will ensure that, as a minimum, a passcode or similar security feature will be required to authorise payments. The service will also offer the technical capacity for financial institutions to remotely disable an account in case of suspected misuse.
The new mobile payments service will move money directly between accounts using tried and tested payment schemes: the Faster Payments service, which processed more than 800m online and phone banking payments in 2012; and the LINK network, which processed 3.1bn real-time ATM transactions last year.
Mobile money image via Shutterstock