Back in June we ran a story here on the Which4U blog that explained the use of smartphones to withdraw money from ATMs through the use of 6 digit codes instead of using a card. In this article, we also mentioned that it was not the first attempt at this sort of technology, with a similar system that had been developed by cash machine operator NCR, using barcodes instead of numerical codes.
Then in September we did a follow up piece on ‘Project Oscar’; a smartphone based wallet being created by a group of service providers (EE, O2 and Vodafone) which was said to provide a simple and secure shopping experience for the consumers that opt into the service.
These follow other attempts at a digital revolution in UK banking, with Barclaycard, Visa, Paypal and even search engine giant Google trying to get in on the act with their own applications and devices to push mobile banking forward.
The New ‘Old-School’
Today, it has been announced that a new way to pay will be reaching our shores in 2014. Payments by text.
Imagine the situation: you’re out for a meal with your friends and you want to split the bill but have forgotten your wallet. What do you do? An I.O.U that can keep on going for months? Or do you just text your friend the amount you owe them and have it sent straight to their account?
Sounds like a futuristic banking system from Star Trek or something… Or at least it would if the rest of the world hadn’t already been there, done that and bought the t-shirt when it comes to text payments.
However, this new scheme does have one major difference to it’s counterparts across the globe. For the first time, consumers that opt-in to the technology will not have to set up a separate account to operate the text payment service, instead being able to run it from their current account.
Cumberland Building Society
Lloyds Banking Group
Royal Bank of Scotland
The Payments Council is looking to bring more institutions on board to the project in the future.
Safer Than You May Think
While this sounds like a reasonably flawed system in theory, the Payments Council has assured us that the proper precautions have been taken to ensure that this system is safe to use.
The Payments Council has suggested that a passcode or similar security measure would be put in place to make sure that this method of payment is as secure as possible, as well as capping the amount that can be transferred out of the account during a transaction – although this has not been set yet.
It will also be possible for banks to remotely disable this service for any account that it feels is guilty of misuse, making it quick to stop funds being taken out, should your phone be compromised.
Research would be conducted to make sure the limit represented a blend of “convenience and security”, the spokesman added.
With the introduction of 4G in the UK, mobile banking may see an increase in the next couple of years, and this could help to win over any skeptics that remain.