Mobile money - has its moment come?


Rory Cellan-Jones is given a demo of the Pingit service

Take two scenarios where mobile technology should be able to make our lives easier. A migrant worker in Kenya wants to send your family some money without having to get on a bus and travel for days. A group of young professionals in London goes out for a meal with friends, and when one person pays, the others need to settle up with him.

In the first case, the money transfer system M-Pesa has been allowing people to transfer cash across the country for years now, proving hugely popular. In the second, it only becomes possible today for anyone with a smartphone to send cash to their friends and see it transferred instantly.

The Barclays Pingit system uses a smartphone app to permit person-to-person cash transfers of up to £300. Users who have an account with Barclays - and from March anyone with a UK bank account - can download the app, link it to their phone number, and then send cash to anybody who has linked their mobile number to their account.

This looks like a big step forwards in the long delayed mobile money revolution. When it comes to turning the phone into a wallet, this country - and much of Europe - is in the slow lane compared to some countries in the developing world.

Komla Dumor: Mobile to mobile transactions are already used widely in Africa

In Kenya, the M-Pesa mobile money transfer system was launched in 2007 and is now woven into the fabric of everyday life. In Africa, where just about everyone has a mobile phone but only a minority have a bank account, banking on the move seemed the obvious answer to all sorts of problems.

In Europe I've seen countless mobile banking ideas over the last decade - from the soft drinks machine in Helsinki where you paid by SMS, to the phone which doubled as a travelcard for London's transport system, and innumerable schemes involving Near Field Communication (NFC) technology. But swiping your phone to pay for a coffee or a sandwich is still a minority sport, and few people yet see their handset as a mobile wallet.

But the launch of Pingit could be the moment everything changes. The scheme has two features which make it stand out from previous initiatives and could appeal to a mass audience. For a start, you can see a real need being met - who hasn't been part of that scrabbling around for cash when you sort out a restaurant bill or try to pay a window cleaner?

And then there is the fact that the technology - an app - is one with which anyone who has got a smartphone is now familiar. You don't need to go out and buy a new NFC handset, and then hope all your friends get one too.

And at the heart of it is a powerful idea - that your mobile phone number can become the key to your bank account without you having to hand over your banking details to anyone who wants to pay you.

The Payments Council - the trade body which looks after the nuts and bolts of UK payments systems - is working on a database of UK mobile numbers linked to bank accounts. There will, of course, be plenty of security concerns, and consumers will have to opt in to the database.

Having tried and failed this morning to register to receive payments under Pingit, I'm not entirely sure what will be the biggest hurdles to its adoption - worries about how secure it is, or frustration at the number of hoops you have to jump through to get going.

But the other banks are watching closely. When I spoke to a couple of Barclays' rivals last night, they were keen to stress that they were not going to be left behind in the mobile money revolution. We can expect more apps, more innovation - and a certain amount of hype about the mobile phone becoming the centre of your financial life. But this time it might really be true.

Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this

    Comment number 114.

    Has anyone considered the data saftey aspect of this. Just a thought like. I seem to remember reading something recently about a phone hacking scandal involving some chap called Murd...!

  • rate this

    Comment number 113.

    I think I would trust this more than Paypal as it’s based on an actual current account and the Faster Payments system. So funds will have to be available for the payment to get paid with no risk of the dreaded Paypal claw back.

    The main risk with Pingit would seem to be sending money to the wrong phone number, but if clicking on known contacts this risk should be minimal.

  • rate this

    Comment number 112.

    Great! Now you can text money to your friends who can run to the cash point for you to pay the man behind the counter.

  • rate this

    Comment number 111.

    109. Mick

    I presume the crashing of pans from the kitchen, or the sound of traffic outside bothers you too? Or, heaven forbid, the incessant chatter of people on other tables? Strange how people focus on the inconsequential, and ignore the bigger picture: my neighbour complains about hearing my alarm clock, but apparently seems oblivious to planes flying low overhead...

  • rate this

    Comment number 110.

    @ Paul
    I use PayPal frequently and the cost is minimal. I use it for sending monies abroad. And I can tell you the cost in comparison for the same thing will not be anywhere near the small amount PayPal charge.


Comments 5 of 114



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