Can you text me a tenner?
Ok, we might not be there just yet, but progress is being made to enable us to use the ever increasingly ubiquitous mobile phone to manage our banking.
According to a recent Times article, nearly two million people in the UK use their mobile phones for services such as text alerts for when they have been paid, to transferring money between accounts… mobile banking – promised for years – is finally picking up pace.
Monitise, which has created a cross-network mobile banking platform, says that one of the effects of the recession is that more people want to have constant easy access to their accounts. Indeed, one of the most popular services offered by the banks is a text alert that warns you when you are nearing your overdraft limit. Monitise, has secured deals with more than 65 per cent of the UK’s banks, including NatWest, Lloyds, HSBC and Alliance & Leicester, along with all five UK mobile operators.
Other popular services include ‘money check’, which now seems to be part of the daily ritual of commuting, plus an overseas transaction alert, which warns customers by text if their credit cards have been used abroad. Monitise also says that it has experienced a surge in interest for its ‘money mover’ service, with more than £500,000 apparently having been transferred by mobile phones in December.
The Banks believe that the mobile handset is going to become more important in every aspect of life. People will apparently go back home for their handsets but not for their wallet – my colleague Mark Loosmore regularly forgets both! Banks feel the need to be present on the device to help customers to gain better and tighter control of their money… in the past you would wait for your statement at the end of the month or quarter and then find that you had been overdrawn for the last 20 days. Although ATMs and the internet have improved information access, the mobile offers a quicker, easier and potentially more dynamic relationship between banks and their customers.
Other companies such as Txttrans, allow people to send money or make payments from Credit or Debit Cards by text message. It allows seamless integration to existing websites and infrastructure and also includes multi-currency support. A new company called MoBank – formed by ex Egg and First Direct bankers – is due to be launched soon and this will allow users to Pay a bill, buy a gift, book tickets or purchase travel cards via the phone.
In a report published last month, Juniper Research forecast that 150 million people would use their mobiles for banking transactions by 2011 – with 70 per cent of these being in Europe and the US. However, and somewhat ironically, the west currently lags far behind developing countries, such as Kenya and South Africa! Here, these people often don’t have bank accounts or access to a bank branch and so the use of mobile payments has been truly life-changing.
Vodafone’s award winning M-Pesa service, launched in Kenya through Safaricom in 2007, now has 5.5million users and is growing at a rate of 10,000 new accounts per day. The service allows customers to deposit cash and send it to other mobile phone users on any network. As a result, it currently carries over 1 million transactions per day compared to approx 1 million per month in the UK. Interestingly, one of the effects of the recession has been to reduce the number of transfers in Europe amongst the migrant workers – especially the Polish – who were particularly active transferring money back home to their families.
Security is clearly a big issue and concern, with the banks having been cautious about engaging with the service until they can be safe in the knowledge that it cannot be tampered with. However, banks are now more confident as companies like Monitise boast ‘Bank grade protection’ [256bit encryption] as part of the service.
This month has seen Barclaycard and Orange announce a partnership to develop a ‘touchless’ pay-by-phone service using ‘near-field communications’ (NFC). Although they have not said what hardware will be used, they have said that it will be possible to pay for certain goods and services by waving the phone over an in-store reader. Whilst it may still be early days, it will be interesting to see how long it is before the mobile phone replaces the wallet. Sadly, this will not help Mark, but it may mean that he can rely on others to borrow a ‘virtual’ tenner!
Written by Mark Thelwell - Visit Website