Mobile Payments... Here at Long Last?

We have been hearing about the advent of mobile payments for a long time - both from mobile providers and banking institutions.

We have been hearing about the advent of mobile payments for a long time - both from mobile providers and banking institutions.

Perhaps you remember Simpay, a mobile payments association launched with great fanfare in 2003, which was one of the more promising ones.

Founded by four major European mobile phone operators, it promised to revolutionise the payments industry by enabling consumers to charge payments up to €10 or less to their mobile phone bills. However, prior to its consumer launch, it disbanded, rumoured to be because one of the operators got cold feet. It's a good case study for the complexity and challenges posed by bringing several competitors under one umbrella and making it work.

But judging by the buzz around the launch of new mobile payment system Paym, it looks like the industry has finally come into its own, and m-commerce is gaining real momentum.

Why all the hype? Because nine banks are already signed up, with several more committed to joining later this year. And with multiple banks onboard, offering the same easily-integrated payment app, Paym could be just what's needed to break down the barriers to swift payments.

And the app is really simple. Once the sender and the recipient are registered and you have downloaded the app, you're ready to go.

Very promising, but there are several hurdles to overcome. Fears about smartphones containing personal data being stolen is a big concern for consumers.

There's not a huge amount of information available on Paym's website about the intricacies of its security, but it does say it has been "developed by the participating banks and building societies to meet with their high security levels". And payments cannot be sent without inputting your unique password or security code.

And for now at least, there are limitations to this service. Not all banks are signed up yet, you can't use Paym to make payments in shops as it's purely for sending funds to individuals, nor can you send money overseas. Plus, you can only sync up one current account with a mobile number. But apps like Paym will get more sophisticated with time, and so will the way we spend money.

It's very easy to see how this app is extremely and immediately useful. Taxi fares and restaurant bills can be split amongst groups of friends far more easily - one pays the bill, the rest quickly pay their share to that person via Paym, meaning no more trips to the cash point.

More to the point, could this herald the end of rounds in the pub?! Instead of one person drawing the short straw and having to buy in a massive round, only to find that a just a couple of people end up returning the favour, groups could have a whip-round on Paym, transferring funds to one designated person who then buys the drinks on their card.

For now, the mobile commerce space is developing fast, with Transport for London announcing that it's in talks with EE and Vodafone to allow commuters to use their NFC-enabled phones to pay for Tube fares, and the launch of other ventures such as Zapp and Pingit, which are not dissimilar to Paym.

It remains to be seen if Paym can build enough trust in consumers and learn lessons from m-commerce ventures such as Simpay in order to promote mass uptake. But it certainly looks as though paying for goods as we know it might soon become a thing of the past.

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