New banking app to allow payments between phones

FRIENDS splitting a bill at a restaurant or those who chip in for a colleague’s leaving present will be able to repay each other using only their mobile phones under a soon-to-be launched payment scheme.

A group of nine banks are to take part in the initial roll-out of the system. Picture: Ian Georgeson

The Payments Council yesterday unveiled details of “Paym”, which will allow consumers to move funds from account to account, without the need for sort codes or account numbers.

A group of nine banks – including Bank of Scotland, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank – are to take part in the initial roll-out of the system, while others are expected to join later in the year.

Sign up to our daily newsletter

The i newsletter cut through the noise

The scheme will allow people who need to make payments to other individuals to do so using payment technology linked to their mobile phone number.

The money will then be transferred to the other person’s account without them needing to swap bank details or sort codes.

“We’re all used to the idea of a ‘mobile update’ to improve our apps – Paym is a mobile update for payments that means you can pay securely using just a mobile number,” said Adrian Kamellard, chief executive of the Payments Council, which co-ordinates payment systems in the UK.

“Paym will make it easier to repay a friend for cinema tickets, split a restaurant bill or settle up for a colleague’s birthday collection.

“The service has the potential to link up every bank account in the country with a mobile number.

“Millions of people will be able to use it this year and we look forward to expanding Paym even further, so everyone can benefit from this easy, secure new way to pay.”

Paym, which has been in development since 2011, is set to expand further later this year – with Clydesdale Bank, first direct and Royal Bank of Scotland among the second wave of financial institutions due to sign up to the scheme.

Consumer groups welcomed the system, but warned it could make it easier for people to overspend and said it tapped into the trend for more things to be done via smartphones – reducing the need for cash.

“Any secure and reliable innovation in the payment market is great news for consumers,” said Matt Sanders, banking spokesman at

“More and more people are using banking apps and this advance into mobile payments will lessen the dependence on traditional banking methods and will serve a new, tech savvy generation of banking customers.

“But I do fear that it will make it a lot easier for people to overspend. Taking away the physical need to have a debit or credit card or visit a cashpoint, means that people could lose touch with what they are spending and when.”

Which? executive director, Richard Lloyd, said: “It’s good to see technology being introduced to allow consumers to make payments more easily. With a string of recent IT failures, banks must ensure their systems are up to scratch and will be able to cope with the increased online demand.

“We also want reassurance that consumers’ details are safe and secure, and there are proper safeguards in place if anything goes wrong.”

A final launch date for Paym has yet to be announced.