Caution urged over smartphone cashless payment apps

16/02/12

Barclays' Pingit app

The growing number of cashless payment systems could provide opportunities for criminals, internet safety experts have warned.

Getsafeonline.org says as some online stores - particularly for Android handsets - don't verify downloads are safe, there's a risk of fake apps phishing for customers' bank details.

The warning comes as Barclays launches an app to send money simply by using someone's phone number.

Tony Neate, from Getsafeonline.org, explained: "Someone could decide to create a new app and call it something similar to the Barclays app and put it on a site that's uncontrolled, un-monitored.

"So making sure you've got the right app from the right place [and] that it's genuine is critical."

'Texting cash'

Barclays' Pingit app lets users transfer cash for free to anyone with a UK mobile phone number and current account.

There's no need to share details like account number and sort code.

"It's a bit like sending a text," said Barclays' spokeswoman, Elizabeth Holloway.

Window cleaner
Image caption Pingit is useful for sole traders like window cleaners says Barclays

"The app is pin protected, but after registering it you can just go to your phone contacts' book and click on who you want."

The recipient then gets a text message to say they've been sent the money. They have 24 hours to register, else the payment won't go through.

To receive cash, anyone can register on the Barclays website or on a smartphone.

But for the first few weeks, only the bank's own customers can use the app to send cash.

It's being pitched as a handy service for sole traders - like window cleaners or plumbers - who can't take credit card payments.

Split bills

The app could also make life easier for some businesses, says London restaurant manager Dean Hughes.

He says big groups paying separately on multiple cards slow down his staff.

It seems pretty secure... Normally I read reviews of apps and check it's safe before I download anything
Nadine, 17, A-level student

"If you get big parties of people coming in - 14 or 15 - wanting to pay individually, that's going to take up maybe 10, 15, 20 minutes," explains the restaurant boss.

He thinks the app could speed things up if one customer paid and the rest sent their share on their phones.

Seventeen-year-old shopper Nadine agreed she would be happy to use it: "It'd be so much easier for going out for birthdays, or for when I go to university and want to split bills with housemates."

But the A-level student says she would only use it if she was sure it was safe: "My phone has a pin, then the app has a pin, so it seems pretty secure.

"Normally I read reviews of apps and check it's safe before I download anything."

Getsafeonline.org's Tony Neate thinks that's a good idea and - despite his concerns - agrees that Pingit could be safe if users are careful.

Cashless future?

Other cashless payment apps are already available. PayPal, for instance, allows iPhone users to "bump" handsets to exchange funds.

But the success of cashless apps will largely depend on them being proven safe.

"I think there's just the same risk as with cash," says Barclays' Elizabeth Holloway. "If you lose the money from your wallet you're not going to get that back.

"But we have all the pin protections and other back up stuff, so if you lose your money on this or any other system you'll get it back."