Whilst UK mobile operators have yet to fully unveil their plans for a mobile wallet joint venture, dubbed Project Oscar, the UK’s Payments Council has been quietly working with leading banks and payment networks to roll out a nationwide mobile payments service next year in which the operators appear to have zero input.
The service won’t be SMS based, as has been reported by some media sources. According to the press release issued by the Payments Council, the service will allow users to pay friends or businesses via their mobile “as easily as sending a text” – which is not the same as saying via SMS. The payments will be made via Internet connection from, mostly, mobile banking apps downloaded on users’ phones. It is also be able to make payments from online banking sites on the mobile browser.
Banks representing 90% of UK current accounts are already on board and each bank will be encouraging their customers to register for the service. To register, users will just need to go online, put in their mobile number and specify which account they want to make payments from. An industry-wide registration drive is planned when the service launches.
Essentially, users’ mobile numbers will act as a proxy for bank account numbers and sort codes. Once set up, users will just need to key in the mobile number of the person they wish to pay to make a transfer. The idea is that most people tend to know their mobile number by heart but struggle to remember their account number and sort code. And when paying family, friends and acquaintances, users will more likely than not have these people’s mobile numbers stored in their mobile phonebook.
Who needs mobile wallets?
It’s a simple idea – reminiscent of the Pingit app launched by Barclays last year, which also enables person-to-person money transfers using mobile numbers as identifiers. There is no need for phones to be especially equipped with secure elements or NFC antennas; or for users to set up a separate mobile-wallet account; or for complex, long-drawn out negotiations to take place between a long cast of would-be value-chain members, including mobile operators, handset makers, OS providers, banking and payment entities, and retailers.