What is PayM?

Paym launched in the UK on Monday April 29, 2014 with much fanfare. It is a peer-to-peer (P2P) payment system launched by the Payments Council UK, and directed at anyone who is short on time, and willing to trade the pocketful of loose change necessary to make the smaller transactions in life, for the convenience of paying from their already ubiquitous phone.

As of May 9, 2014, the Payments Council UK’s Senior Communications Officer Neil Aitken could report that more than 500,000 users had registered their mobile numbers with their primary bank or building society. Half a million people – that is quite an impressive number.

Payments Council UK is a collaborative body that works closely all UK organizations involved in payments:  banks, government, small business, industry and individuals.  One of their prime objectives is to ensure the operational efficiency, effectiveness and integrity of payment services in the UK.  Another mandate is “to ensure that payments services work for all that use them in the UK”.  With the advent of new technologies, the general public is searching for faster and more convenient ways to transact.  Paym was developed in response to these needs, and is a collaborative project engaging most of the UK major banks and building societies.

Mr Aitken was able to verify that registrations had been up 45% since the service launched.  However, stats on usage are not yet available.  When they are, it will be very interesting to see the early adopter demographics.

In conversations with various users – even some in the payments industry –  in the UK, I was not able to find anyone who had yet experimented with this innovative payment mechanism.  Many were waiting for the kinks to be worked out – wary of being among the first.  Some were not yet aware of this new functionality.

I am predicting that aside from those who are naturally risk takers and early adopters of technology, the biggest tier of adopters is going to be the first and second year University students starting this fall 2014.

Will students lead the charge on Paym?

Pay by phone – one less thing to carry

I suspect it will not be long before Paym transactions becomes as familiar on university campuses as the ATM. And from there, it will seep into the culture of the daily transactions on the High Street, phasing out the need to carry around the familiar but bulky pound and fifty pence coins. Why?

• This cohort has never lived in a world without the internet.  The internet is as much a part of their universe as the air they breathe. It is an enabler, and as the Internet of Things will prove, an integral, familiar and natural progression of the way they live.

• The fear of using online banking, Paym and other mobile wallet solutions is directly proportional to age and assets. The more you have to lose, the more wary you are of being among the first to test a new technology.

• There is a Convenience / Risk /Privacy triangle – one that is constantly tilting on a 3D axis. Any advantage we gain in one usually comes at a cost in one or both of the other factors.

Students often share everything from meals, grocery bills, entertainment, bar and café bills as they live from one cheque to another.  They have a much lower balance exposure if their bank account is compromised.  Paym now grants them protection and privacy.  They can protect their intimate details such as bank accounts and sorting codes, but initiate a transaction with a piece of data they already share multiple times a day  – their mobile number. With the Payment Council also guaranteeing the transactions against fraudulent use, the triangle tips heavily in favour of Convenience in this demographic.

Never Borrow, Never Lend – if you want to keep a friend .. can now be a saying from the past.

The convenience of being able to settle up quickly and conveniently, without fishing for change is not to be under-estimated.  Particularly prevalent among the 18-25 year age group, casual IOUs happen around trips to the cinema, or rounds at the pub.  These IOUs can mount up, especially if you are the kind of person who gives freely, but dis-likes asking for money.  Many friendships have been broken over such forgotten repayments.  Paym takes the embarrassment out of asking for that micro-loan back.  The Payment Council appropriately refers to this as ‘leisure lending’.  With all this convenience, Paym will soon be a more common solution to this growing occurrence in this age group.  Most grateful for this development will be the ‘Bank of Mum and Dad’ that often foots the bill for the benevolence.

Just as this demographic brought streaming content into their parent’s living room, from their laptops and mobile phones, they will bring the convenience of Paym to their parents, who will find it a faster and easier of sending their child travel fare so they can come home for Christmas.   As larger segments of the population grow more comfortable with the convenience and relative security of this technology for small transactions, it will seep into the common culture and way of life – paying your babysitter, or tipping the milkman.  And soon, paying your friend by phone will be no more inconvenient or strange than standing at the bus stop chatting to someone on your Bluetooth.

Paym hits Main Street

How does it work?  What are the risks?

Paym payments will only work through your existing mobile banking app.  Having a specific logon and password makes this more secure than just being able to text money from your phone.  Paym requires that you have registered your phone number and connected it to your personal bank current (chequing) account.   You do not have to be registered to receive payments, and do not need a sophisticated smart phone.  Paym FAQ page  answers a range of questions from how to send and receive money, if you need a smartphone, the risks, limits and exposure.

All the major banks also collaborated to educate the public in time for the launch via various press releases and interviews.    This interview published by The Telegraph with a demo by HSBC, shows how conveniently payments can be made.

Want to learn more?

• Contact your local bank or building society
• Go to the Paym FAQ page: http://www.paym.co.uk/faqs
• The Payment council Paym White paper: http://www.paymentscouncil.org.uk/files/payments_council/paym/paym_white_paper_final.pdf
• View this video from the Broadcast Exchange:  http://youtu.be/v-AomRVj7XI

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Over to you:

–  Have you used Paym?  Was it easy to set up and use?

–  If you are a student, do you think Paym will be a convenient way to settle IOUs?

–  Do you think this was an innovative initiative?