Payment by text message on its way to the UK
Payment by text message is on its way to the UK, provisionally launching in spring 2014.
Account owners will be asked by their banks if they want to opt-in to a database.
The system will mean people can send and receive money to others by sharing just their mobile number – rather than having to swap other details such as sort code or account number.
However, the Payments Council said a passcode or similar security measure would ensure the system could not be abused.
Account holders who do not wish to have their details in the database will be able to refuse – only those customers who actually opt-in will be signed up.
The eight institutions already backing the service are:
- Cumberland Building Society
- Danske Bank
- Lloyds Banking Group
- Metro Bank
- Royal Bank of Scotland
Its launch will bring the UK up to speed with technology long in use in the developing world.
Many African nations use systems such as M-Pesa, typically seen as a secure way to transfer funds quickly between individuals and businesses.
A spokesman for the Payments Council said it had taken the UK longer to catch up due to the technical challenge of building and testing a new database to power the system.
Mobiles in the UK are already being used for a variety of online banking tasks, with services such as Barclay’s PingIt simplifying sending money to and from accounts.
But this new set-up will be the first to not require users to set-up a separate account with a mobile wallet service.
The scheme will be administered by the Faster Payments service – which processed more than 800 million online and phone banking transactions in 2012 – and the Link network, which processed 3.1 billion cash machine withdrawals last year