A new service lets you text cash - but would you use it?Barclays will today launch a new mobile payments service, which it claims could mark as a significant watershed in the way people bank as the advent of the credit card.
By linking customers' mobile numbers to their current accounts, the service, Pingit, will enable people to send and receive payments between UK accounts, simply by texting another mobile from their smartphone.
Initially, the app will only enable Barclays current account holders to send
payments to other accounts, but anyone with a UK account will be able to use
the service to receive money.
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It has significant potential for small payments between friends, for example sharing restaurant bills, or fees for school trips.
However, Barclays hopes eventually to allow customers of other banks to use Pingit to send money, as well as to roll the service out for international transactions and bill payments.
"We think we're at a transformational moment for banking," Antony Jenkins, chief executive of Barclays Retail and Business Banking, told The Daily Telegraph . "It is difficult to predict the pace of adoption but it has the potential to be as big a change as the credit card."
"I don't believe financial services have been transformed by technology
yet. All that has happened is that we have replicated in the virtual world
what we do in the physical one."
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Barclays will not charge customers to download the app or use the service,
which is available on the iOS, Android and Blackberry operating systems.
However, it hopes it will carve a position for itself as the leader in
mobile banking in Europe and use Pingit to get a foot in the door with
customers of its rivals.
"We see Pingit working across the whole UK population, rather as we did with Barclaycard. Even today, only a third of Barclaycard customers are Barclays Bank customers as well. This way we have a relationship with more customers," Mr Jenkins said.
The bank is thought to be between a year and two years ahead of its nearest rival in rolling out robust technology of this sort.
However, Barclays is not just warding off competition from rival banks. It has
learnt a lesson from developing markets such as Kenya and South Africa,
where "mPesa" mobile payment technology has transformed the
economy. The system is so ubiquitous that mobile operators have effectively
become banks and disenfranchised traditional players like Barclays. Mr
Jenkins said he had learnt lessons from mPesa and fought to gain first mover
advantage in Britain.
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