30 million bank customers will soon be able to make payments using little more than a mobile phone number following the launch of a new service. The Paym service will take effect on 29th April and affect customers of many major UK banks.
Customers wishing to use the service will have to register their mobile phone number and link it to their account. They will then be able to make payments to anybody in their contact list who has also registered with the Paym service. They will not need to have that person’s bank details such as account number or sort code. The mobile phone number linked to the recipient’s account will suffice.
A number of UK banks are taking part in the Paym initiative from the launch day. Notably (but not exclusively), the list includes:
- HSBC
- Barclays
- Lloyds Banking Group (including Lloyds Bank, TSB, Halifax and Bank of Scotland)
- Santander
- Royal Bank of Scotland
- Nationwide
Only a few major high street banks have not signed up to take part in the initiative from launch. Perhaps the most notably absent name is the Co-operative Bank, which is currently going through turbulent times. The bank seemed to indicate in a statement that they will keep an eye on Paym’s progress following its launch with a view to potentially taking part in the future.
The system is in some ways reminiscent of M-Pesa, the revolutionary mobile banking solution from sub-Saharan Africa. However, where M-Pesa allows payments to be made through phone calls or texts, Paym will be incorporated into the mobile banking apps already used by banks and building societies.
According to the Payments Council’s chief executive Adrian Kamellard, the new system “will play a big role in making mobile payment normal.” Kamellard went on to say that the introduction of Paym “recognises the fundamental importance of payment via mobile.”
Kamellard was also keen to reassure consumers about the security of Paym. He said that “Paym is making use of highly secure systems” as well as stressing that “no third parties are involved.”
With mobile payment becoming an increasingly hot topic in consumer banking, Paym is set to be complemented by the launch of an app called Zapp. Expected this autumn, Zapp will cover separate territory to Paym. While Paym focusses on bank transfers, Zapp will be designed to enable people to pay for goods. Initially it will focus on online transactions, but in-store purchases are intended to be covered at a later date.