Do you need Pingit?

Posted in 'Banking' by Jessica Searle

24 May 2012

So you can call, text and surf the web on your phone – what else would you want? Transfer money from your bank account to another is the answer.

The latest app to be widely produced by not only the high-street banks, but online companies such as Google, is turning our mobile phones into mobile wallets; but how safe is this technology, what are the benefits, concerns and implications?

The app will use the banking industry's ‘faster payments’ system to instantly transfer the funds from one bank account to another, or to hold money within a 'wallet' registered to the phone, which can then be used to make payments. In order for this to happen the individual will have to have an activated app upon their phone, and know the recipient's phone number who must also be registered for mobile banking as well.

The payment will progress as follows:

→ Choose the app on your smartphone screen

→ Enter a Pin number or passcode to log on to the app

→ Choose the recipient and select their mobile phone number

→ Enter the amount to be paid, with any reference details e.g. 'loan'

→ Enter a PIN or passcode to confirm the transfer

→ Payment is made

→ Details appear on the recipient's app

→ Your account shows the reduced balance.

Fears have been expressed over the safety of such technology, because of the ease of a phone being lost, destroyed or stolen. In a recent survey only 17% of Britons said that they would be happy to use their mobile phone as their wallet, indicating a general feeling of unease by the remaining 83% who clearly weren't so happy. To appease fears of losses from the fraudulent use of wallet-based payment technologies, the banks have agreed to a limit on the amount that can be transferred.

Barclays has stated that it will implement a £300 daily transferral amount, with customers being able to receive up to £5,000 daily from users – the amounts doubled in the case of joint account users.

If the phone is lost, stolen or destroyed, once notified the mobile network will automatically inform the banks. They will disable the phone number upon the banking databases only re-enabled with the registration of a new mobile number. Any mobile payments made to your account in the meantime will come back with a message that the phone number is no longer valid.

Despite these safety fears, the ease with which small payments can be made, together with customers no longer having to wait 3 working days for a cheque to clear, and also knowing instantly what their account balance is, make Pingit an attractive proposition and a useful addition to payment technology.

It seems inevitable that the rise of the mobile wallet will quickly adopted by consumers, as not only banks but also internet service providers such as Google are showing an increasing interest in the development of such products.

Jessica Searle is a Credit Analyst at checkmyfile and has a degree in English Literature from the University of Exeter. You can contact her at jessica.searle@checkmyfile.com