Paying for bills, products and services in the UK will be made an awful lot easier in 2014 when a new mobile payments service, based around phone numbers, is launched by the Payments Council with the support of eight major financial institutions.
The new service, which the council claims will be as simple as sending a text message, will allow users to make secure payments without typing in their sort code and account number. Instead, the user’s mobile phone number will be used as a proxy, replacing all of the various account details that have been stored on their device beforehand.
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Eight major financial institutions; Barclays, Cumberland Building Society, Danske Bank, HSBC Bank plc, Lloyds Banking Group plc, Metro Bank plc, Royal Bank of Scotland plc and Santander UK plc, have confirmed that they will use the scheme when it launches in spring 2014. Together, these banks represent 90 percent of UK current accounts, bolstering its chances of being picked up and used by the wider public.
The project will move money between accounts using what the Payments Council describes as “tried and tested payment schemes”. These are the Faster Payments service, which processed over 800 million online and mobile banking payments last year, as well as the LINK network, which handled 3.1 billion real-time ATM transactions in the same period.
The collaborative Payments Council project – the idea doesn’t appear to have a final name just yet – is thought to be the first service to link almost every bank account in the UK with a mobile phone number. This alone should differentiate it from alternative mobile payment solutions, including the existing app offerings from major banks such as Barclays.
Barclays Pingit was launched in February last year, becoming the first person-to-person service for sending money in this way. Interestingly, even people without a Barclays account can sign up to the service provided they use it conjunction with a Barclays Pingit Wallet account.
The company’s website reads:
“Anyone can use Barclays Pingit to send or receive money. The app is free to download and use, payments are secure and it takes seconds for money to arrive. You just need a UK current account, a UK-registered mobile number and smartphone, and to be aged 16 or over.”
Adrian Kamellard, Chief Executive of the Payments Council, said the new mobile payments project being built by the Council would be “far-reaching” and offer “innovative improvements” for users. “[It] 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,” he added.
Shortly before the project is launched in Spring 2014, the participating financial institutions will be inviting customers to register via their online banking service or mobile app. The Payments Council says that from here, users will be able to specify what mobile phone number they want linked to their account. Clearly there will be a few more steps in the process, but that’s something the Council says will be announced “in due course”.
For mobile payments there will always be a tug of war between making the process as simple and frictionless as possible, and keeping personal details safe and secure. The former usually means removing the need to type in passwords, account numbers and the like, while the latter just adds them back in again.
The Payments Council conducted its own research with over 5,000 consumers and discovered similar concerns. In a press release, it promised that “as a minimum, a passcode or similar security feature will be required to authorise payments.” The Council also added that banks would have the ability to remotely disable an account if they suspected misuse.
Over the course of the next 12 months, the Payments Council will be working on a set of rules which will define the minimum service standards for secruity, speed and any other technical requirements.
Image Credit: Junko Kimura/Getty Images