UK banks get behind m-payments service ahead of 2014 launch
15 January 2013 | 14903 views | 7
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."