U.K. Banks Debut P2P Payments Service (May 5, 2014)
A group of the biggest financial institutions in the U.K. have banded together to launch a new P2P mobile payments system that by year-end will be accessible to 9 out of 10 bank account holders in the U.K. Dubbed Paym, the P2P service—which is backed by most of the major U.K. banks, including Lloyds, Barclays and HSBC, along with several smaller banks—got out of the gate strong, with more than 360,000 people registered at the time of its launch last week. More banks and users are set to join the Paym fold, at which point the system will be available to 40 million users in the U.K.
The banks and the Payments Council—which coordinated the launch—have set their sights high, projecting 1 billion payments to be made over the platform by 2018. The system enables users to transfer funds to recipients, including service providers, such as babysitters and housecleaners, by selecting the recipient’s mobile number. Received funds are than deposited into an account linked to the number.
While ubiquity doesn’t seem to be an issue for Paym, security concerns could hinder widespread take-up. A recent poll by Consumer Intelligence found that nearly half of U.K. bank customers surveyed said they would avoid using the system, with 71 percent of those respondents citing security concerns. However, Paym was more well-received by younger, more mobile-centric consumers; 39 percent of respondents ages 18 to 34 said they planned to use the system.
One of the banks behind Paym has experience operating a large-scale mobile P2P payments service. Barclays launched its Pingit service more than two years ago and recently expanded the platform to offer new features, including a mobile checkout function and a B2C feature that enables large firms to send payments to individuals.
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