In a move Barclays Bank PLC hopes will make consumers wonder how they ever used to exchange funds with one another, the United Kingdom-based bank is making mobile funds transfers available to all UK bank accountholders through a free software application called Pingit.
During the initial launch of the service, only Barclays accountholders will be able to send funds, but consumers older than 18 with accounts at any bank can receive payments after registering on the bank’s website, the bank announced Feb. 16.
The service appears to be similar to the QuickPay person-to-person funds-transfer service JPMorgan Chase & Co. offers.
Barclays plans to make Pingit available to all UK bank accountholders by early March, the issuer stated in a press release.
The service links a Barclays customer’s account with his mobile-phone number, allowing the individual to transfer funds by typing in the recipient’s mobile number when using the application, Barclays stated.
Because UK’s Faster Payments Service handles the transfers, which customers protect with a five-digit passcode, funds move directly from the sender bank account to the receiver bank account, Barclays stated. Pingit alerts recipients via text messages that funds have been added to their accounts.
Barclays did not indicate any fees for the funds transfers in the press release, though the issuer website indicates “normal transaction charges may apply” to business customers.
Customers, who will require a smartphone to send funds, may download the Barclays Pingit application from the Apple Inc. App Store, Research in Motion Ltd. Blackberry App World and Google Inc. Android Market.
Barclays views the application as potentially helpful for families and friends who may need to split a bill or lend money to one another. In addition, small service-related entrepreneurs, such as plumbers or carpet cleaners, could receive payments through the funds transfers, the bank stated.
Antony Jenkins, Barclays chief executive of retail and business banking, views Pingit as a revolutionary step in how consumers exchange funds. “For friends splitting the cost of dinner, repaying a borrowed £10, or people sending money to a son or daughter at university, it’s free, quick, convenient, secure, and easy to use,” Jenkins stated in the press release.
Users may send and receive funds in less than 30 seconds, without having to enter account details, Jenkins added. “I’m sure we’ll soon be wondering what we did before it,” he suggested.
Barclays should be congratulated for continuing to innovate and push mobile payments in the UK, but Pingit could encounter a few bumps along the way, Zil Bareisis, a London-based senior analyst for research firm Celent, tells PaymentsSource.
“The first hurdle for the bank is making absolutely sure that when someone is trying to link their bank account details to a mobile phone, they are definitely the legitimate owners of both,” Bareisis says.
However, the banks could face a double-edged sword in securing legitimate data, especially from those consumers who initially have to register online to receive payments because they do not have a Barclays account, Bareisis suggests.
Early feedback on the new application indicates some consumers contend the registration process is “deliberately cumbersome,” which could prove to be a barrier for some who otherwise would be willing to try Pingit, he adds.
In addition, funds transfers through Faster Payments are irrevocable and final, Bareisis notes. “This puts the onus very much on consumers to make sure that they select the correct mobile number and enter the right amount, as mistakes may not be easily reversed,” he suggests.
Bareisis contends small-business operators ultimately may benefit the most from Pingit, but he remains unconvinced that consumers need a mobile setup to share dinner bills.
“The traditional example of person-to-person payments of ‘splitting a restaurant bill’ is overused,” he says. “In the UK, a group of friends after a meal would just ask the waiter to split the bill directly on their credit or debit cards.”
As for Pingit security, a fraud-protection and risk-management company executive suggests fraudsters most likely will target mobile-payment applications as they steer away from the difficulty of hacking chip-and-PIN transactions.
“Barclays’ launch of PingIt is a very positive step forward in the development of ‘mobile money,’ and we fully support it,” Pat Carroll, CEO of Ireland-based ValidSoft, said in a statement released to the media.
However, fraudsters attempt to manipulate both the sending and receiving of cash through tactics such as sim swap, a technique whereby fraudsters can divert calls or actions made via a phone away from the number they are intended to reach and toward a different number for their own gain, Carroll added.
The Barclays announcement continues a trend in which software developers, payments companies and banks seek ways to make mobile-payment methods an easier option for consumers.
Last month, Scottsdale, Ariz.-based Spindle Inc. released mobile applications for P2P, person-to-business or business-to-business payments (see story).
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