TECH

Paym - What Is It And Why Should You Care?

29/04/2014 12:02 BST | Updated 29/04/2014 15:59 BST

It's not quite paying for stuff with your veins - but it's getting closer.

Paym ("pay-em"), a new mobile payment service that could link every current account with a phone number, has been launched.

The new service will enable more people to transfer money just by using mobile phone numbers can be used by customers of Bank of Scotland, Barclays, Cumberland Building Society, Halifax, HSBC, Lloyds Bank, Santander, TSB and Danske Bank.

By the end of the year, a total of 40 million people will be able to access Paym, when Clydesdale Bank, first direct, Isle of Man Bank, NatWest, Royal Bank of Scotland and Yorkshire Bank come on board. By that point, Paym will be available on more than nine out of 10 current accounts.

Paym, which is pronounced as "pay em", has been described as the first industry-wide collaboration in the UK which could potentially link up every bank account with a mobile number.

Although it is anticipated that many people will use Paym to make small payments to friends and family, they will be able to transfer at least £250 a day under the scheme if they want. Some banks and building societies will have a higher daily limit.

People need to actively register their mobile number alongside a nominated current account in order to receive money into that account through Paym.

By the end of last week, more than 300,000 people had registered to be able to use the service.

People do not have to register for Paym in order to send money through the service, although their bank or building society does need to be taking part in the scheme in order for them to do this.

The service will allow people to transfer cash payments on their mobile by using the recipient's phone number rather than needing to know their bank account number and sort code. It will be integrated into their existing mobile banking or payment app.

To make a payment, you can either select the contact you wish to pay from your phone or key in their mobile number.

The app will ask you to confirm the name of the recipient and the amount before the money is sent.

Adrian Kamellard, chief executive of the Payments Council, which is overseeing the initiative, said: "Paying someone back just got easier for millions of people.

"Paym is another safe and easy option to pay friends and family."

Payments made through the service are made at the same speeds as existing current account, online and mobile payment services.

More than 94% of adults now own a mobile phone and strong growth in mobile payments technology has already made it easier for people to leave their wallets at home.

Barclays' Pingit app, which launched just before the 2012 Olympic Games, picked up 2.5 million regular users in just 18 months.

Pingit, which is available to both Barclays and non-Barclays customers, also allows people to make payments using just mobile phone numbers.

Another mobile payments scheme, called Zapp, is set for launch this autumn. Zapp is a subsidiary of payments provider VocaLink, the company behind Link cash machines.

Nationwide Building Society has confirmed its intention to join the Paym scheme in early 2015 while Metro Bank and Ulster Bank are also finalising their launch plans.

Last week, the Payments Council announced that people who accidentally send money to the wrong bank account will be able to get better help in clawing it back by the end of next month.

A new voluntary code will mean that people get quicker and more consistent help from their bank or building society after they have alerted them to a wrong payment, although someone who raises such a claim is not guaranteed they will get their money back.