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TMCNet:  Pay-by-mobile service shocks Barclays rivals

[February 20, 2012]

Pay-by-mobile service shocks Barclays rivals

Feb 19, 2012 (Financial Mail on Sunday - McClatchy-Tribune Information Services via COMTEX) -- Rival banks are scrambling to start mobile phone money transfer systems after Barclays wrong-footed the industry last week by launching a revolutionary new product.

The Pingit system allows users of smartphones to make payments using their mobile phone number.

Barclays -- which recruited more than 20,000 Pingit customers in just two days -- plans to make the service available to the customers of all other banks. One source at a rival bank admitted: "There is nothing we can do to stop our customers signing up to the service." The Pingit system is threatening to become the industry standard. Royal Bank of Scotland, owner of NatWest, is understood to be looking at similar ideas as is Lloyds Banking Group.

HSBC said it had no plans at the moment to launch a Pingit rival, but a spokesman said the move by Barclays was "certainly a step forward for the banking industry." The launch has sidestepped the Payments Council, which is in charge of money transfer systems such as direct debits and cheques. The council has been running an industry-wide project to look into mobile payment systems, but is at least a year away from a solid plan.

Antony Jenkins, chief executive of retail banking at Barclays, said the system would revolutionise banking at least on the scale of phone and internet banking over the past 25 years. He said: "You can send and receive money in seconds without having to enter account details." The Pingit App is free to download to any smartphone such as a BlackBerry or iPhone. Jenkins admitted that at this stage there was no direct way for Barclays to make money from the system, but as customers at rival banks download the app, it could become an opening for Barclays to sell other products.

The Pingit App works by setting up a direct link between a customer's mobile phone number and their bank account details.

Once the app is downloaded, all you need to make a payment is to know the recipient's mobile phone number. For security, access to the Pingit App on your phone is controlled by a five-digit PIN. Payments are capped at pounds sterling 300 at the moment.

Figures from the British Bankers' Association show the numbers registered for internet banking almost doubled between 2006 and 2010.

Meanwhile, Monitise Group, the British maker of mobile phone banking and payments systems, is planning a rapid expansion in Asia.

In Britain, the group provides the software for traditional internet banking over smart phones. It also runs Pingit-style mobile services for banks in Africa. Last week, the Aim-listed firm revealed an interim turnover three times higher than last year at pounds sterling 15.8 million.

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___ (c)2012 the Daily Mail (London, ) Visit the Daily Mail (London, ) at Distributed by MCT Information Services

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