Paying a friend or business on your mobile as easily as sending a text is set to become a mainstream option in spring 2014, when the UK's Payments Council's new mobile payments service launches in the Spring.
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. Eight financial institutions1 - representing 90% of UK current accounts - have already committed to offering the new service from spring 2014, with discussions continuing for more institutions to join.
While there are existing ways to pay using a mobile, e.g. Barclays Pingit, the collaborative Payments Council project marks the first service with the potential to link up every bank account in the country with a mobile number.
Shortly before launch, participating financial institutions will invite customers to register via their online banking service, mobile app or other approved method to provide their mobile phone number and confirm which account, they want to link it to. More details about the industry-wide registration process and precise launch date will be announced in due course.
Over 5,000 consumers participated in Payments Council research, which revealed that the service is likely to prove most popular with smartphone users, who accounted for two thirds (67%) of those surveyed. One in three smartphone users said they were either definitely or extremely likely to sign up to the new service at launch.
The consumer research also highlighted the importance of the security of mobile payments. The Payments Council service will ensure that, as a minimum, a passcode or similar security feature will be required to authorise payments. The service will also offer the technical capacity for financial institutions to disable remotely an account in case of suspected misuse. Beyond these common features, providers will be free to innovate and customise exactly how they offer the service to customers.
Faster Payments will move the monies
The new mobile payment service will move money directly between accounts using tried and tested payment schemes: the Faster Payments service, which processed more than 800 million online and phone banking payments in 2012; and the LINK network, which processed 3.1 billion real-time ATM transactions last year.
Over the next year, the Payments Council's delivery programme is continuing the work needed to set rules defining minimum service standards for security, speed and other technical requirements. This includes comprehensive end-to-end testing, preparing and implementing the pre-launch registration campaign and speaking with other interested financial institutions to ensure the service is made available to the highest possible number of customers.
This new service is bound to speed up the move in the UK to mobile payments and companies will increasingly be asked for this payment option. Do your company's bill collection systems connect to Faster Payments?
The other impact of this new m-payments service will be to reduce the use of payment cards at the point of sale. How do your Faster Payments charges compare to your debit card and credit card charges?
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