Ten years ago, paying for goods with your mobile phone may have seemed like the stuff of science fiction, but became a reality after the Payments Council announced the new payment option in 2014.
Financial institutions committed to supporting the launch of the first industry-wide mobile payment service, which will see security-protected payments being sent by mobile.
Customers can now send and receive payments straight from their account after a simple sign-up process with their provider. The process is as simple as texting and no account details like sort code or account number is disclosed.
While there are existing ways to pay using a mobile, the collaborative Payments Council project marks the first service with the potential to link up every bank account in the country with a mobile number, which is expected to drive much more widespread use of the service.
How will it work?
The new mobile payments service will move money directly between accounts using tried and tested payment schemes.
1) The Faster Payments service, which processed more than 800 million online and phone banking payments in 2012
2) the LINK network, which processed 3.1 billion real-time ATM transactions last year.
Since the launch, the Payments Council have worked on setting rules defining the minimum service standards for security, speed and other technical requirements. As a minimum security requirement, it a passcode or similar security feature will be required to authorise payments. The service will also offer the technical capacity for financial institutions to remotely disable an account in cases of suspected misuse.
Who will use it?
The service is likely to prove most popular with smartphone users.
The move to widespread mobile payments could benefit small businesses that currently have to pay high rates for taking card payments. Offering customers more convenient ways to pay as well as being able to take payments on the go can also help to increase sales and profits for small firms.
For more information, visit the Payments Council website.
To read more about how important technology is going to be for small businesses, click here.
Article last updated 1st June 2016
Paying for goods on your mobile phone is now a reality