Our recent research shows that Australians are flocking to mobile devices, and have an expectation that full banking services will be available 24×7 on these platforms. Digital Natives in particular are demanding a wide range of mobile facilities.
So I read with interest the announcement from the UK’s payment council, (which is the body with responsibility for ensuring that payment services work in the UK) a new service called Paym (Pronounced “Pay Em”) which is a simple, secure way of paying using a mobile number will be available from 29 April 2014. The service will be integrated into customers’ existing mobile banking or payment apps as an additional way to pay. Payments can be made to any customer registered on the payments platform without sharing any bank account information, and payments are made without any delay, with transactions up to £250 available.
During 2012 the Payments Council commissioned the infrastructure to deliver the service. An integral part of this is a central database which links mobile phone numbers to bank accounts, allowing customers to pay someone directly using a mobile number.
“Paym allows customers to make secure payments to account holders of other participating banks or building societies using their mobile number. It keeps customer account details safe by using a mobile phone number as a substitute. Put simply, if you are in my phone’s contacts list I can pay you straight from my bank account to yours quickly and securely anywhere and at any time of day. I don’t need to know, or remember, your sort code or account number; I can just select your number from the contacts list on my phone, or enter your mobile number. This is the first service in the market which has the potential to link every bank account in the UK with a mobile number.”
Whilst there are limited mobile payments mechanisms working in the UK, this is a mainstream alternative. Paym, will be available to customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank. Royal Bank of Scotland has signed up to the service but will not launch until later this year. Clydesdale Bank, First Direct and Yorkshire Bank will also join the scheme in 2014. Nationwide Building Society, Ulster Bank and Metro Bank will launch in early 2015.
The process sounds pretty simple.
- A potential customers need to register their phone number and the account they want payments made into with their bank or building society to receive payments through Paym. Friends and family will then be able to pay directly into any registered account using just a mobile number – no sort codes or account numbers are needed.
- To send a payment, customers can select the mobile number they want to pay from their contacts (or enter it manually) along with an amount and a reference. The sender’s bank accesses the Paym database to confirm that the recipient is registered with the service and to retrieve their bank or building society account details. The app will confirm the name of the recipient and then once the sender is happy, they check the amount and press send.
- The person sending the payment will receive immediate confirmation that it has been sent. The payment is sent by the secure Faster Payments Service or by the LINK network, that already processes millions of current account payments every day. Because Paym is integrated into customers’ existing mobile banking or payments apps, all transfers will happen at the same speed they are used to. Many will be almost immediate.
- The payment will be processed whether or not the recipient’s phone is on or within coverage. In most cases the payment will reach the recipient’s account almost immediately and they will be able to see it in recent transactions on their account.
- Paym has been developed by the participating UK banks and building societies to meet with the high security standards already applied to their existing mobile banking or payments apps. All personal information is held securely and the only information stored by Paym is the details needed to send and receive payments.
- Each of the participating banks and building societies will offer their own branded services which will compete with each other in the normal way; they will continue to differentiate their product to attract new customers and keep existing users, and this will make sure that innovation continues to be encouraged in the wider area of mobile payments.
In Australia, mobile payments is progressing, sort of, but so far we have not see an industry wide-program such as paym.
Computer Weekly summarised the local scene in an article in January 2014. “Commonwealth Bank and Westpac are so far leading the pack, but ANZ Bank and National Australia Bank (NAB) say they are planning to make their own moves soon. Mobile payments in Australia are largely based on near-field communications (NFC) technology, which can be embedded either inside a smartphone or a smart sticker that can be attached to the phone. NFC is included in many major Android, Windows and BlackBerry phones. However, Apple so far has not included NFC in the iPhone.”
Time for the industry here to step up so rather than each developing a proprietary flavour of mobile payments, we need a coordinated national initiative. Mobile payments needs to be a mainstream initiative. Paym offers a potential roadmap.