When I leave my house in the morning there are three things that I check my pockets for before walking out the front door: wallet, phone and keys.
I don’t remember exactly when the phone became one of the most important items that I own but there has been one in my pocket every day for well over 10 years now. The first one didn’t really fit in my pocket, but gradually the technology improved to the point where I am now never more than arms reach away from my mobile.
However, the way I use my mobile has changed in that time too. To begin with I only used my mobile to make calls, and then to text. Now I use it to check my emails and surf the internet more than I do to make calls and it seems there is an app for everything I need to help me manage my day-to-day life.
Of course, all of the services I now access on my mobile - whether social networks, online shopping or internet banking - were available to me before I had a smartphone. The fundamental change is that I, along with millions of others, now expect to be able to do these tasks using a phone, in a way that is completely intuitive.
Convenience is king and that is why we at the Payments Council have worked hard with the payments industry to launch Paym [pronounced “Pay Em”], a new way to pay using just a mobile number. We won’t need to use account numbers and sort codes to pay friends and family and the service will use the same high level of security as the payments we already use every day.
Every smartphone user is now used to the idea of ‘mobile updates’ that improve the services they use on their mobile. Paym is a mobile update for payments - it’s the first industry-wide collaboration with the potential to link up every bank account in the country with a mobile number.
Paym (pronounced “Pay Em” will be available to more than 30 million customers from the end of April, through participating UK banks and building societies. The service will expand to many millions more before the end of the year - we hope it will create simplicity in a crowded and often confusing mobile payments marketplace. Paym will make paying friends, family or small traders much easier for millions of customers, by removing the need for sort codes or account numbers.
How does it work?
Registration for Paym has already begun and the service will be available from 29 April. Paym will be available to customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB, giving them an easy way to pay back their friends and family.
To receive money through Paym, customers first need to register their mobile number and the current account they want payments made into with your participating bank or building society.
To send money using Paym, customers will be able to use their existing mobile banking or payments app to select a friend’s number from their contacts or enter a mobile number manually – and it’s possible to send without registering a mobile number to receive. Customers will be able to send up to £250 a day, although the participating banks and building societies can offer a higher daily limit, and certain restrictions can apply for customers under 18.
The participating banks and building societies will be getting in touch with their customers directly over the next couple of weeks providing information on how to register. We expect that by the end of 2014 up to 40 million people will be eligible for the service - that’s more than 90 per cent of the current account market.
Say for example you are paying John Smith £20. You would use your existing mobile banking or payments app to select his number from your contacts or enter his mobile number manually. As part of the process you’ll be asked to confirm the name of the recipient – so you can be sure you’re paying John Smith before you press send. Once you’re happy, check the amount and press send.
You’ll receive confirmation that your payment has been sent. And because you’ll be using your existing mobile banking or payments app, it couldn’t be easier, it’s just as secure and most payments are processed almost immediately; it’s also worth highlighting that at no point does the sender see the recipient’s sort code or account number.
Which providers will it be available with?
In addition to the nine bank and building societies offering the service from launch (Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank), the service will be expanded further still later in 2014 with Clydesdale Bank, first direct, Isle of Man Bank, NatWest, RBS International trading as NatWest, The Royal Bank of Scotland, Ulster Bank and Yorkshire Bank having committed to join. This means that Paym will be available on more than nine out of ten UK current accounts. Nationwide Building Society has also confirmed its intention to join in early 2015, while Metro Bank head up the list of other interested parties who are finalising their launch plans.
Is it secure?
Money is transferred using the same systems already used to transfer account funds, Faster Payments and LINK, so the service benefits from the same high level of legal protection as existing electronic payments, through the Payment Services Regulations. The service has security measures such as password activation, mobile number verification and confirmation requests as standard, and participating banks and building societies have all signed up to a security code of conduct to protect the service from fraudulent activity.
Part of the research before we launched Paym showed us that some people were not comfortable sharing their sort code and account number; similarly others were not as keen on paying via a phone number. Ultimately Paym is there to provide greater choice for bank customers.
What about the future?
Clearly, these are exciting times for mobile payments. In a world where many of us are inseparable from our phones, it’s readily believable that more than 1 billion Paym payments could be made in the next five years, as our forecasts suggest.
By Adrian Kamellard, Chief Executive of the Payments Council
If you would like to learn more about the service, then please visit the Paym website at paym.co.uk.