UK banking service aims to make it easier to pay small IOUs
More than 30 million people in the U.K. got access Tuesday to a new service that links their mobile phone numbers to their bank accounts, allowing them to transfer and receive small amounts of money without going to a bank or cash machine.
Another 10 million people with U.K. bank accounts will be able to use the Paym service later this year as more banks bring it online. Some 49 million people have U.K. bank accounts.
Paym is meant to make it easier for people to pay small debts to family or friends, or to pay small bills to, for instance, a plumber, said Jemma Smith, a spokeswoman for the UK Payments Council, which launched the service.
“It is the first time we’ve got a system with the potential to link every account to a mobile number,” she said.
The service is available now for customers of Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds Bank, Santander and TSB. Customers from other banks have to wait until the end of the year to start using the service because not every bank was able to complete work to get the service going, Smith said.
Banks including the Royal Bank of Scotland, the YorkShire Bank and NatWest will add the service later this year. By the end of the year, the service will be available to over 40 million of the approximately 49 million account holders in the U.K., Smith said. Banks that aren’t participating now could always decide to add the service later, she added.
Paym generally allows users to send up to £250 (US$420) a day, although some banks allow a higher daily limit, according to the Payments Council.
A smartphone is not necessary to receive payments, though it is to make them, said Smith, who added that about 72 percent of U.K. citizens currently own a smartphone. Eventually, some banks might also incorporate Paym into their online banking platforms, she said.
To send money, an existing banking payments app can be used to enter a mobile number or a user can select a number from the phone’s address book. Users are asked to confirm the name of the recipient and are shown a record with a name to be able to verify the right number was used, Smith said.