SmartDebit have responded to the Payments Council’s announcement that mobile phone users will be able to send and receive money by sharing only their phone number by Spring 2014.
According to the BBC, the payment service is optional, as banks will ask account owners whether they want to opt-in to a database that will allow the sending of money via text message. A high percentage of smartphone owners already engage in a variety of online banking tasks via their device, but this method will be the first to not require the user to set-up a separate account with a mobile wallet service.
The service is being built and administered by the Faster Payments service, the company that processed more than 800 million online and phone banking transactions during 2012, and the ATM network, Link, who processed 3.1 billon cash withdrawals in the same period.
The system will allow people to send and receive money to others simply by sharing their mobile number, as opposed to having to hand over their sort code and account number. The security issue was met by the Payments Council assuring that there will be a passcode or a similar security measure to ensure the system could not be abused by fraudsters. Furthermore, there will be a limit to the amount of money that could be transferred via the service, but there it yet to be a decision on the amount.
Research carried out by the Payment Council involving more than 5,000 consumers suggested that the service is likely to be most popular with smartphone users, who accounted for 67 per cent of those surveyed.
A spokesperson from the SmartDebit commented on the new system, “It is such a simple, effortless method of transferring money between individuals or businesses, one that has been established in African nations for some years now. The adoption, or opt-in, of this system will be largely dependent on security assurances as well as guarantees from the banks in case of erroneous payment or fraudulent activity.”
Barclays has signed contracts with six of the fintech startups that just graduated from its second New York accelerator programme.
Company card killer Pleo has raised $3m in new funding as it prepares for public launch in the UK and Denmark.
Cheques are become less and less common in the UK according to new research from global market research firm Mintel which claims contactless card use has overtaken cheque payments in the UK for the first time.
Payments for digital and physical goods made mobile operating system-based payments platforms like Apple Pay and Android Pay are expected to boom in the next few years according to new analysis from Juniper.