The Payments Council has announced that UK mobile phone owners will be able to send and receive money by text from 2014, simply by sharing their mobile numbers.
Rather than having to swap account numbers and sort codes, users who opt-in to the scheme will use just their mobile phone number plus another security measure, such as a passcode, to prevent abuse. Banks will be able to remotely disable accounts which are suspected of misuse. There will also be limits on the amount of money that can be transferred.
The BBC states that “8 major financial institutions” will back the scheme:
- Barclays
- Cumberland Building Society
- Danske Bank
- HSBC
- Lloyds Banking Group
- Metro Bank
- Royal Bank of Scotland
- Santander
This list covers 90% of UK current accounts (not sure what % the Cumberland Building Society make up out of that figure!). It is hoped that further financial institutions will join in before the service launches. The service will use the infrastructure of existing payment schemes; the Faster Payments service and the LINK network.
Shortly before the launch, customers will be asked to sign up for the service with their financial institution, and will choose an account to link to their mobile number.
Barclays have really pushed the idea of transferring money with a phone number thanks to their PingIt app, but this new scheme will aim to open up payments via a phone number to a greater number of people, without the need for a “mobile wallet”.
The scheme is set to go through significant design and testing processes over the next year, with a view to launch in spring 2014.
Seems good, but there could be more venerability in terms of bank frauds as accessing bank accounts using just your mobile number could become easier task for hackers to hack bank accounts. I hope all such things would have been considered before launching this service. After all banks are more interested to make spending easier for their customers and earn more transaction charges.