The Payments Council has announced that it will be launching its new Paym technology, which allows people to transfer money to the bank accounts of others simply using their mobile phone number, on 29 April.
Registration for the new service begins today (2 April), so those who want to make use of the new payments technology can express their interest with participating banks and building societies.
The Paym initiative will make it easier and quicker for registered users to transfer money to friends and family. According to the Payments Council, UK consumers tot up around £255.81 of IOUs and other informal loans from friends and family each year.
All told, this means people in the UK rack up a total debt of £12.6 billion, with the IOUs covering everyday expenses, such as lunch with friends, cinema tickets and drinks.
Adrian Kamellard, Chief Executive of the Payments Council, said: “Our IOU research suggests that every adult in the UK is lending just under £5 per week to someone they know. Small sums like this soon add up so it’s great that Paym will give people a new option of quickly and securely paying someone back - whether it’s for lunch, a train ticket or just a cup of tea.”
Customers of Bank of Scotland, Barclays, Halifax, HSBC, Lloyds, Cumberland Building Society and TSB can register for the scheme today, while Danske Bank customers can register from 25 April.
Registering will link a mobile phone number to an account, meaning from the 29 April launch date money can be received straight into that account.
Customers of Clydesdale Bank, first direct, Isle of Man Bank, NatWest, RBS International trading as NatWest, The Royal Bank of Scotland, and Yorkshire Bank will be able to register for and use Paym later in the year, with Nationwide Building Society set to join the scheme in early 2015.
The research shows that while consumers are quick to remember how much they have lent to others, memories tend to cloud when it comes to what they borrow from their close friends and relatives.
Paul Flatters, Chief Executive of Trajectory Partnership a consumer trends forecasting consultancy, that conducted the research, said: “We found that when it comes to IOUs, people are four times as likely to identify as lenders than borrowers. One reason for the overall imbalance between perceptions of lending and borrowing may be our innate instinct for loss aversion. Human beings strongly prefer avoiding losses to acquiring gains.”
By Gary Cooper