Given that almost 12 million people bank with Barclays, the potential is huge. The bank thinks we’ll soon be wondering what we did before it, while industry body The Payments Council is setting up a database which will link all bank accounts to their owners’ mobile phone numbers.
The foundation is being laid for mobile payments to become the norm.
So, how does it work?
Firstly, you need to download the free Pingit app to your iPhone, Android or BlackBerry. Those of us still in the dark ages without a smartphone (myself included) will still be able to receive money but won’t be able to send it.
You register to use the app by handing over your bank account details and various other bits of security information to ensure you’re properly verified. Once you’re signed up, Barclays will link your account details to your phone so that other people can pay you using just your mobile number.
To make a payment, you choose who you want to pay from your list of contacts or type in their number, select how much you want to send and confirm your payment. Barclays will then send them a text telling them how to access their money.
As it stands, Barclays customers can only send up to £300 a day, while anyone receiving a payment must register within 24 hours or the transfer will be cancelled.
Is it safe to use?
The app is protected by a five-digit PIN code, so provided you don’t choose something obvious like your birthday this should prevent phone thieves from sending themselves your cash.
Barclays also claim that the app features ‘industry standard encryption’ and that the app can automatically be wiped from your phone if you tell the bank it’s been stolen.
However, security experts are warning that the device could be copied – replica versions of official apps such as Angry Birds already exist and it’s possible that criminals could create malicious software to target the Pingit app.
What’s next for mobile money?
Mobile banking is already big business across Africa, with millions using mobile phones to move cash, pay bills and buy basic everyday items.
Near field communication – a type of contactless payment technology – is also changing the way we pay for goods in shops and has been in use in Japan and South Korea for several years.
Back in the UK, Lloyds Banking Group and Royal Bank of Scotland are both said to be looking at launching similar services to Pingit over the next 12 months, while HSBC has ruled itself out.
So while Barclays appears to have stolen a march on its rivals, there’s still some way to go before using your mobile to send money becomes as routine as sending a text.