By : Robert Johnston
May 16, 2014 06:56 PM
British financial institutions are literally taking banking direct to consumers with the launch of an innovative new platform that will let people make payments using only a mobile phone number.
Paym, which launched April 29th in the UK, enriches the customer experience and is set to radically alter how people pay each other -- from settling restaurant bills to buying larger gifts. It's a major step forward in the field of mobile payments.
"Paym is a great example of industry-wide collaboration that delivers tangible benefits for customers," said Adrian Kamellard, chief executive of the Payments Council, a group of service providers, organizations and end-users charged with ensuring quality standards, safety and secure payments in the UK.
Currently, customers from Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank can register for the capability, with many other financial institutions set to take part soon. They include Clydesdale Bank, First Direct, Isle of Man Bank, NatWest, RBS International trading as NatWest, The Royal Bank of Scotland, and Yorkshire Bank, which have all committed to join later this year. Nationwide is set for entry in 2015.
What can Paym do for you?
In short, Paym makes transactions easier. If you’re a bank customer who needs to send money to family or a friend, you can do it from your mobile phone. Let people pay you without telling them your account number, or pay for an item -- it’s oh so simple with Paym. There’s no need for account numbers. By just using the recipient's mobile number (provided that person has registered with the system), it is now possible to send money via Paym using the participating bank or building society's mobile banking or payments app. The money goes straight into the registered person's account. And, they can send money to you as well.
Services like this are not entirely new, but it will be the largest service that lets people move funds between accounts without the need for account numbers or sort codes.
At its heart, Paym is a simple platform, but one that make payments more convenient. Its roll-out shows banks are being responsive to consumers, taking on what customers are telling them they want and delivering it to them.
Just as the Payments Council stepped back from ditching checks because of consumer concerns, the UK's payment sector seems able to adapt in unison to the changing requirements of the market.
"The service has the potential to link up every bank account in the country with a mobile number,” said the Council’s Kamellard. “Millions of people will be able to use it this year, and we look forward to expanding Paym even further, so everyone can benefit from this easy, secure new way to pay."
As ever, security is a key issue for consumers, which is why Paym was created with security in mind. It will be interesting to watch how many consumers sign up for the capability. Half of the challenge for banks will be to explain to customers that the platform is just as secure as their mobile banking apps.
But given how popular mobile banking is in the UK - transactions have doubled in the last year - it's likely that Britain's consumers will be keen to adopt Paym.