Paym is the new buzzword this week in the mobile payment space, but what does it mean and why should you care?
What is Paym?
From the 29 April you can pay your friends and family using just their mobile number, rather than having to ask for their account number and sort code. A number of banks are involved, but you will both have to be registered to use the service.
How does it work?
Register with your bank and then when it comes to sending or receiving money you simply send them money using your bank's existing mobile banking app. Sadly you can't just text them and say "Pay Stuart £20".
Who came up with the idea?
The concept of Paym started in Africa allowing millions of people to pay each other without having to worry about going to the bank, and because your phone number is something you use all the time it caught on. Now the UK banking industry is hoping that we'll soon all be paying each other via Paym rather than using competeting services like PayPal, iZettle and other virtual wallets.
Most of the UK banks have signed up, although the noticeable one that is missing straightaway is Natwest. It has said it will be rolling out support later this year.
On day one it will be Bank of Scotland, Barclays, Cumberland Building Society, Danke Bank, Halifax, HSBC, Lloyds, Santander, and TSB.
Other banks and building societies have committed to join Paym later in 2014, these include: Clydesdale Bank, First Direct, Isle of Man Bank, NatWest, RBS International trading as NatWest, The Royal Bank of Scotland, Ulster Bank and Yorkshire Bank. Nationwide Building Society has confirmed its intention to join in early 2015, while Metro Bank is finalising plans to join.
When can I start using it?
The service goes live on the 29 April. All you need to do is register with your bank to be able to use the service.
Do you have to own a phone to use Paym?
No, but you will have to register a mobile phone number for it to work and to receive payments.
It sounds dodgy, is it safe?
Yes, because it works via your current banking app. In reality it is really just about assigning your bank account details to your phone number.
Could anything go wrong?
If you change your phone number and you don't tell your bank that you've changed it, then future payments could go to someone else, or if you change your bank then that would cause problems too. Don't worry it should be easy to change your details.
What happens if my phone gets stolen?
It isn't possible to send a payment using Paym without your app's password or security code, but you should still contact your bank or building society immediately to report a lost or stolen phone.
Because it runs through your app, which is already safe and secure, as long as you don't have your password on a sticker on the back, you also get the same legal protection with Paym that is already applied to your current account, online and mobile payment services. You are covered providing you didn't act fraudulently or without reasonable care.
How much can I pay someone?
You will be able to send up to £250 a day.
Is it free?
At the moment none of the banks are charging because they want people to sign up and use it, that might change, but we suspect if they do then people can easy say no and stop using the service.
Can I pay for things in shops on the high-street or online?
Not at the moment. The system is designed for individuals rather than shops, but as long as they are registered you could use it to pay the babysitter or a tradesman. Just think how useful it could be if everyone at the local boot sale also accepted it.
What about using Paym to send money abroad?
Sadly not, it only works with the UK banks at the moment.
How quickly will I get paid the money?
Payments made through the service will happen at the same speeds as existing current account, online, and mobile payment services. That means in most cases it should be instant, unless it's 2am on a Saturday.
Can I have more than one account associated with my phone number?
That would be lovely wouldn't it? Just pay £10 to this phone number and my six connected bank accounts will all be credited. As you can probably guess, the answer is no, you can only have one account associated to your mobile at any one time. The only deviation from this is that for joint accounts you can have two mobiles (i.e., one phone number per person) connected to the account.