Tuesday, April 29, 2014

Paym launches in UK ... as cheques edge towards retirement

The bill arrived in Pizza Express and I noticed a message on the curled up roll of paper mentioning that it could be settled via their app. Sure enough, I could type in a code to the app, log in to Paypal and the bill was cleared …

Except that the process still requires the waiter to walk back to the till to confirm that it had been processed and we weren’t about to walk out of the restaurant having pretended to pay the bill! A handheld device that updates the table’s bill status in real time must be the next development.

Another electronic payment innovation launches today.

Paym allows the transfer money between people with a minimum fuss. It relies on you registering your mobile phone number against a bank account. Then rather than juggling sort codes and account numbers you simply enter a friend’s mobile number into your bank’s app (or select it from your contacts), specify the amount (up to a daily maximum of £250) and press send. It works between banks so should be fairly flexible as support widens.

Nine UK banks launched their support for Paym this morning: Danske Bank (that's their personal banking director Tony Wilcox with finance minister Simon Hamilton in the photo), Barclays, Halifax, HSBC, Lloyds Bank, Santander, TSB, Bank of Scotland and Cumberland Building Society. Locally, the Ulster Bank are expected to support Paym later this year; Nationwide Building Society in early 2015.

Paym is the next step in the move from cash and cheques towards a cashless society.

At the moment Paym is intended to be used for payments between individuals. Informal splitting a bill between friends, paying babysitters and tradespeople. But you could imagine a demand for it to be extended over time to schools allowing dinner money (and the myriad of other ad hoc charges) to be paid by parents without having to hunt through the house for the correct change or a cheque book. (The ability to add a simple message to the payment should allow the pupil and the purpose of the payment to be identified.)

Paym is also part of banks reinforcing that the smartphone in your pocket and computer on your desk are taking over many of the facilities that used to be solely offered by physical bank branches and hole-in-the-wall machines. Be in no doubt that Paym is as much about the banking industry introducing efficiencies (ie, cost savings) at the same time as offering innovative customer service.

Cheques are 350 years old. But as they head to retirement, perhaps one of the remaining use cases that hasn’t yet been adequately replaced is the ability to scribble a cheque and put it inside a birthday card without having to run out to buy an store giftcard. Maybe in the future, banks will give us books of blank prepaid debit cards that we can tear out, top up online and hand out to celebrating family members! Or maybe the art of present-buying will have to return ...


Niall said...

I'm sure this marks me out as an absolute luddite, but I can't think of a use case for this that isn't already well covered. For those scenarios where there's already a good - or good enough - answer there now will be another one. For those where there's no currently good solution, there still isn't.

A sort code/account number combination is 14 digits, whereas UK mobile phone numbers are 11 (10, if you omit/assume leading zero). I've heard arguments inferring that it is less hassle to get a mobile phone number than sort code/account details, but I don't see why that would be - I'll not have a mobile number for a restaurant / school / etc already stored in my contacts list.

In the school scenario, direct payment is probably a good thing (assuming the transfer narrative can consistently identify the different reasons for which cash may be being sent). Useful innovation here could allow dinner payments to be made via standing order spread over 12 months? Cash is very straightforward to allocate to an internal account (e.g. fundraising for , dinner money, school family donation, bus fare contribution to swimming pool, school trip payment, etc).

Reimbursing a friend who's paid for dinner is an easy one - give them cash, or if they don't "do" cash anymore then buy them dinner back. Simples :-)

Perhaps, though, I'm a luddite. I would love to see some examples that would illustrate how my life would be easier and therefore justify the compromise of giving my mobile number to strangers (to be used / stored I know not how!).

Niall Gillespie said...

Four payments out, four back in, all with fellow geeks in work. All have gone through in a few seconds. Very easy to use, and I think it will be very handy.

I'm with Santander (so yes, I've now met the conditions to get the £3 incentive payment from Santander). My payments have all arrived showing my work landline number, rather than my mobile number which would be the more sensible number to include. I phoned their helpdesk, and they already had it captured as feedback from a few customers, so hopefully they will change this sometime.

Santander sends me a text when a payment is received for me. The text for one colleague with Danske showed their mobile number, the text for another also with Danske did not show any number.

I’ve also had a payment from God! Well, more accurately MR STEPHEN CHRIST. Looks like Santander truncate the full name to fit in the text message, and it led to an interesting truncation. The transaction that shows up online does have the full name.

Payments Council have been making a big deal about helping people not send money to the wrong account:
“Banks and building societies will ensure the design of online, mobile and telephone payment channels reduce the risk of a customer making a mistake. This might involve: customers being asked to input account details twice; extra warnings about using the correct account details; or prompting customers to check payment details that have not been used for some time so that they can be updated or deleted as necessary.”

Paym retrieves the name associated with the mobile number before the user confirms the transaction, but on the Santander app, this is in non-bold small text, whereas the name taken from my contacts list is in bold and more prominent. So not quite sure that Santander have met the spirit of the guidance – when my friend was using his Danske app, my name was much more prominent. It’s not an issue that worries me for my own use.

BTW, I’m a different Niall to whoever posted the first comment - Alan, you have too many friends called Niall.

Paul said...

If it lets you make (or receive) a remote payment more cheaply than paypal, it may be a good thing. Not getting ripped off is a good use case.

But as Niall (or was it Niall?) said, sort code and account number would be a perfectly good way of doing this - you may not want everyone who splits a bill or pays you money to have your mobile number.