A scheme to make sending cash via mobile phone as easy as texting will be in place this year, the UK Council has announced.
Customers who register for the service will have their mobile numbers and account numbers linked on a central database and the initiative will be available to banks and building societies before the end of 2012, the Payments Council said.
The new payment technique will be useful for both retail and business bankers that have connected their current account with the mobile phone. By using the system, individuals and businesses will be able to send payment instantly and be alerted right away when a payment has been received.
The Payments Council is building a central database that will allow customers to link their mobile phone number to their account details, regardless of who they bank with. It will be available to UK banks and building societies before the end of this year as a platform for them to build their own competitive service for their customers. VocaLink has been appointed to build the central database.
The service will be available on any smartphone with an internet connection on any network, and customers will sign up with their own banks so they won’t need to share their account details with anyone else.
Huge advances in mobile payment technology are expected this year, with Barclays already unveiling a free app allowing people to send and receive money via their phones. The bank plans to make the Pingit app available to all UK adults from March, regardless of the bank or building society they use.
Richard Martin, head of innovation at the Payments Council, described mobile payments as a “rapidly developing marketplace” with “limitless” possibilities, and said he expected the scheme to co-exist alongside a number of innovations.
“What we’re doing is offering a common infrastructure that any institution can plug into. Our role will be to set out some minimum security requirements,” he said.
He added that the body had considered how the payments might be used, for instance paying a friend or relative or a sole trader such as a plumber or window cleaner – all cases in which cash or a cheque might traditionally have been used. “Our proposition is giving consumers the option of simply and quickly firing off an electronic payment,” he said.
The database, which is being built by VocaLink, will let registered customers make or receive “almost instantaneous” payments from their existing accounts. Banks and building societies can then customise how they offer the service, which will be most commonly delivered through an internet browser or an app.