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Phone payment scheme set for 2014

The UK's first industry-wide scheme to allow people to transfer cash to friends and businesses as easily as texting will be up and running from spring 2014, the payments body has said.

Eight financial institutions, representing 90% of UK current accounts, have already signed up to the project, with more expected to follow, said the Payments Council.

The new service allows people to make payments to someone else simply by using a mobile phone number and without needing to know their sort code and account number.

Customers will register for the service through their own bank, without having to share their details with anyone else. Those involved in the scheme are Barclays, Cumberland Building Society, Danske Bank, HSBC, Lloyds Banking Group, Metro Bank, Royal Bank of Scotland (RBS) and Santander.

The Payments Council had said a year ago that it expected the scheme to be available by the end of 2012, but a spokesman said the Council has decided to hold off until 2014 as it wants to ensure that as many people as possible are reached on launch. This will help the success of the scheme and give people a consistent experience, the spokesman said, rather than introducing the initiative in stages.

The body's own research found that one in three smartphone users said they were definitely or extremely likely to sign up to the new service at launch. The Council said it will carry out more work over the next year to set rules about minimum service standards and technical requirements. This marks the final phase of the project, following the on-time completion in December of a central database enabling banks to securely store customers' details.

The Payments Council said the scheme is the first "with the potential to link up every bank account in the country with a mobile number". However, Barclays already has a similar scheme in place called Pingit, which has been running since February last year and is available to customers of all UK banks and building societies.

The Barclays scheme has been downloaded more than 1.3 million times and Barclays said that 13% of users are not its own customers. Barclays said it is "fully supportive" of the Payments Council's initiative, which will supplement its existing service.

Although the scheme will not get under way until next year, the Council expects that banks will start contacting customers about linking their mobile phone number to their accounts in the weeks and months leading up to launch.

Adrian Kamellard, chief executive of the Payments Council, said: "The mobile payments project is a fantastic example of the unique role the Payments Council can play in delivering far-reaching, innovative improvements for customers. This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details."

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