Paying using your mobile phone

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If you want to pay your friends easily using your mobile phone, how can you do it? There are several mobile payment systems around, including Paym (pronounced pay-em), which is offered by several of the big banks. Which is the best for you and how do they differ?

Apple Pay
You can use Apple Pay if you have an iPhone 6, 6plus or an Apple Watch, you can make contactless payments using your mobile phone and Apple Pay. Apple says that it doesn’t store your card information on your mobile, but each transaction creates a dynamic authentication code.

SAVVY TIP: An increasing number of retailers will accept Apple Pay. You can pay where you see the Apple Pay symbol, and you can see a list of companies that have accept Apple Pay on Apple’s website. You can also see a list of banks that are involved in Apple Pay.

Android Pay

Google has launched Android Pay in the United States and is due to launch in Australia early in 2016. However, as I write this, I don’t know when it will launch in the UK.

Barclays Pingit
You don’t have to be a Barclays bank customer to use Barclays’ mobile payment system called Pingit. The system is similar to Paym in that you register your account number and mobile phone with Pingit and you can make payments.

SAVVY TIP: Other banks, including NatWest and RBS will let you text payments to your contacts if you’ve registered for online and mobile banking.

Moneto works a bit differently. It turns your mobile phone into a ‘tap and pay’ (or contactless payment) phone. The information is kept on a separate micro SD card (not on your phone’s SIM). You also get a prepaid MasterCard as a backup that you can use when your battery is low or you can’t get reception.

SAVVY TIP: If you have an iPhone, you have to buy a Moneto case that turns your phone into a contactless payment device. It costs between £60 and £80. Most of the time, using Moneto is free, but if you load it from a credit card you have to pay 1.75%.

Before you can use Paym you and the person you want to pay have to register for it (although some banks will let those who’ve registered for mobile banking make payments without registering for Paym as well).

However, you both have to be signed up for mobile banking with your respective banks. You can register to receive payments or to send them.

SAVVY TIP: If you want to register to send payments, you can set a daily limit of how much you’ll be able to pay using Paym.

How secure is it?
The security is provided by your bank’s own mobile banking security system. In order to join Paym, banks must have reached specific security standards.

Which banks have signed up for it?
So far 17 banks and building societies have signed up to offer Paym. They include Bank of Scotland, Barclays,Clydesdale Bank, Cumberland building society, Danske bank,First Direct, Halifax, HSBC,Isle of Man Bank, Lloyds, Nationwide, NatWest, RBS, Santander, TSB, Ulster Bank and Yorkshire Bank. You can see an up-to-date list of banks that have joined on the ‘how to register’ page.

Metro bank is finalising plans to join.

If your phone is stolen
If your phone is lost or stolen, you’d be treated the same ways as if you lost your credit card in that you would only be liable for the losses if you were grossly negligent.

Paypal mobile payments
You can also pay by your mobile using Paypal. You have to register for it, but you can make payments from your Paypal wallet just using your mobile phone and a PIN login.

SAVVY TIP: Your purchases made through Paypal are protected with Paypal’s ‘buyer protection’ scheme.

Zapp payment system
Another mobile payment system is supposed to be launched soon called Zapp. It’s aimed at people who want to pay a business, rather than another individual.

SAVVY TIP: As I write this in January 2016, it hasn’t yet launched. It was due to launch in 2014, then last year….

If you don’t want to give your credit card numbers to a small business, high street trader or online store you could pay by mobile with Zapp.

EE Cash on Tap and O2 Wallet have both closed.

Related articles:

If you make a bank payment to the wrong person, can you get it back?

Don’t pay by bank transfer unless you know and trust the company

Mobile banking – how to bank safely

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