‘Hi M8, IOU £20’ – would you pay for everything by text?
The concept of transferring money just by using someone’s mobile phone number isn’t new, but how would you feel about carrying out all your transactions in this way?
A new text message payment service has been announced by the Payments Council. This will allow you to make secure payments directly to and from an account, without the need to disclose the sort code and account number.
Eight financial institutions, including Barclays, HSBC, Lloyds Banking Group, Metro Bank, Royal Bank of Scotland and Santander, have already signed up to offer the new service by early 2014. That represents 90% of the current accounts in the UK, with discussions currently taking place with other banks and building societies.
Text message payments – the next logical step
There are, of course, already ways to pay people using your mobile. I occasionally use Barclays’ Pingit, for example. And when I have I’ve found it to be a relatively straightforward and, crucially, convenient way to pay a friend.
Rolling the concept out across all accounts is the next logical step. Many African nations already use text message payments to make quick transactions between individuals and businesses. I personally see no reason why such a service won’t, over time, become a big hit with Brits, assuming it’s secure and user-friendly.
Hard cash vs digital transactions
There’s no doubt technological developments surrounding mobile and online banking have revolutionised the way most of us keep on top of our finances. I know they’ve helped me become more engaged with my money, which is no bad thing at all.
However, I’d argue they’ve also made me more frivolous with my funds too. There’s something about handing hard cash over a counter that really makes you think about whether you need to make a purchase or not.
At the moment, I tend to mainly spend on my debit card because it’s quick and convenient and I don’t have to think about it. At least, not until I wince when checking my bank account balance online. Perhaps text message payments aren’t that much different from this?
Therein lies the potential problem: with budgets hanging in the balance for many of us in these straightened-times, is ‘digitisation’ putting us at risk of forgetting the true value of money? Would you pay by text message?
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