A new mobile phone payments system that will improve the ease of which money can be transferred is set for launch this year.
The system title Paym – pronounced ‘Pay Em’ – will mean people can transfer money between their bank accounts more easily.
Mobile phone applications will be used to make the money transfers, with the main feature being that only the recipient’s phone number will be needed once bank accounts are registered.
Using Paym, users will then be able to send or receive money by triggering the number linked to the account involved.
Increasing banking links
This has raised some security concerns, and although sort codes and account numbers will not be needed for each transaction, a passcode will be required to open an app.
According to the chief executive of the Payments Council, Adrian Kamellard, the new system will enable friends to repay each other quickly for things such as restaurant bills and cinema tickets.
“Paym is a mobile update for payments that means you can pay securely using just a mobile number,” he said.
“The service has the potential to link up every bank account in the country with a mobile number – 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.”
Introduced across the banking sector
Many of the major banks are set to adopt the system, including the Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank and Santander.
Other banks are also set to follow suit later in 2014, with around 90% of all current account holders being covered by the start of 2015.
In order to use the service, account holders will need to register their phone numbers with the account they wish to use.
With banking details therefore more accessible if a mobile phone should be lost or stolen, concerns have been raised about ways of tackling fraud.
Although the system requires a passcode for confirmation, some customers are still wary of making their details readily available when their finances are concerned.
Alternative methods of money management
Existing levels of banking protection will be in place when Paym is used, but for customers wishing to use alternative methods, then managing their money with a prepaid card could be a solution.
It is possible to check expenditure on the card at any given point, and only the finances on the card can be spent at any one time.
It is also not directly linked to a bank account making funds safer while the card can be easily topped up or replaced if required.