20 September 2014

UK banks get behind m-payments service ahead of 2014 launch

15 January 2013  |  12427 views  |  7 mobile

The UK banking sector is gearing up for the introduction of an industry-wide mobile payments service next spring, with eight major institutions committed to the launch.

Last February the industry, through the UK Payments Council, commissioned VocaLink to build a central database that will allow bank customers to link their phone number to their account for person-to-person and person-to-business mobile payments.

The new service will enable secure payments to be made directly to or from an account without the need to disclose the sort code and account number, by simply using a mobile phone number as a proxy.

With the launch a little over a year away, Barclays, Cumberland Building Society, Danske Bank, HSBC, Lloyds Banking Group, Metro Bank, RBS and Santander - which between them represent 90% of current accounts - have all committed.

Shortly before launch, financial institutions will invite customers to register via their online banking service or mobile app to provide their phone number and confirm which account they want to link it to.

The Payments Council says it expects the service to be a big hit, citing a poll of 5,238 people it carried out in November which found that of the two thirds of respondents with smart phones, a third are either definitely or extremely likely to sign up at launch.

The group can also take heart from the success of Pingit, a similar system rolled out by Barclays last year, which was downloaded more than 500,000 times in its first three months on the market.

With security the main concern for potential users, the council says it will make sure that, at minimum, a passcode or similar feature will be required to authorise payments. The service will also offer the technical capacity for financial institutions to remotely disable an account.

Adrian Kamellard, chief executive, Payments Council, says: "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. 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."

Comments: (7)

Tim Tyler - Misys - London | 15 January, 2013, 15:51

The shame is that it is limited to just using mobile phone numbers. If I could link, say, my Facebook profile, or LinkedIn profile, or Twitter, or G+, or Skype (and so on), then digital payments could be made even more accessible. Now, how do I perform my international remittance...?

Alexander Peschkoff - TEDIPAY - London | 15 January, 2013, 16:29

Since when "EMV", "chip" and "secure" are all spelled as "app"?..

David Griffiths - gryffle - Hertford | 16 January, 2013, 10:29

 

:o)

Dave Barnes - . - Edinburgh | 16 January, 2013, 12:35

This is something that RBS, Natwest and Ulster Bank customer have enjoyed for around a year now. With active users in  the millions, this is a hugely popular service. It works with iPhone, iPad, Android and Blackberry.

You can download the RBS iPhone App here: http://bit.ly/t9jyrQ

Now, I know I'm biased, but I have done a lot of research in this area and this is, by far, the best mobile banking application out there in the UK.

Alexander Peschkoff - TEDIPAY - London | 16 January, 2013, 13:12

@Dave

iovation is not in the same league or playing field as Infineon, NXP or Gemalto. Having dual standards (http://bit.ly/XDkZGr) is a bad practice and does not help to move the industry forward.

Dave Barnes - . - Edinburgh | 16 January, 2013, 14:55

I don't disagree with your point about standards from an academic standpoint, but typically across all industries, standards emerge only when something becomes popular and a number of streams are already underway.

I'm sure that all of the current banks that have mobile payments implemented when this initiative lands will support the new standards from day one. However, waiting until the standards are in place before begining will not provide customers with the services they are crying out for.

Moving to a third party, like your company, does not seem like a good  answer for the consumer as it only adds complexity to the situation. Better to make the payment directly from your account to the account of the recipient without going through a middle step that will need to be paid for somewhere in the value stream.

 

Alexander Peschkoff - TEDIPAY - London | 16 January, 2013, 15:35

@Dave

I agree on the need of allowing innovations in. I do, however, object to having one set of rules for the banks and another for the "third parties". If a bank allows its customers to make A2A transfers in a certain way, why shouldn't those customers be allowed to use the same mechanism to transfer funds to "third parties"?..

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