UK banks RBS and NatWest have soft launched a service that enables its customers to send money to other bank account holders, providing the recipient has a Visa-backed account and a UK mobile number.
The two banks, which developed the service with Visa Europe, will initially offer the service to select customers of its mobile banking app, with a full launch planned after Easter.
The banks claim that with 115 million Visa cards currently used in the UK, no other service will be available to so many potential users.
Rival Barclays last year launched a similar service called Pingit which the bank claims has been very successful, and the UK’s Payments Council is backing a scheme to boost interoperability of such money transfers.
The RBS/NatWest service will be available to RBS account holders in Scotland and those of NatWest in England and Wales. RBS owns NatWest and is itself majority controlled by the UK taxpayer.
Payment recipients do not need to register for the service in advance but have to enter their card number into a Visa-secured website to receive their payment.
The attraction of the new RBS/NatWest service and others such as Pingit is their ease of use and security. Senders and receipts do not need to exchange sensitive bank account and sort codes. Instead only the recipient’s mobile number is needed by the sender.
An update to the existing RBS/NatWest mobile banking app will be available in coming weeks as a download for iPhone, Android and BlackBerry devices. An enhanced version of the Windows phone app will be released soon.
The partnership with Visa Europe only covers the UK at present but RBS/NatWest says there is an opportunity for the service to be extended into cross-border payments in the future. RBS/NatWest has previously worked with the credit card firm in other areas, including an NFC trial last year. RBS will also be the first financial institution in the UK to launch Visa’s V.me digital wallet.
Sandra Alzetta (pictured), Visa Europe’s SVP and head of mobile, said mobile technology has the ability to “fundamentally change” the way that people make payments.
The RBS and NatWest Pay Your Contacts service has been available to users of its mobile banking app since June last year but previously could only transfer money between users of the app.
Last year a feature on RBS/NatWest’s mobile app that enabled users to get cash from ATMs without using a debit card was suspended amidst fraud fears. Users could take £100 a time by asking for a secure cash code, which was valid for three hours at any RBS, NatWest or Tesco cash machine. But the service was targeted by criminals.
And earlier this month NatWest faced widespread IT problems which meant customers were unable to withdraw cash from ATMs, pay for goods and services or use telephone and online banking on from 6 March to the following day, a technical hitch which damaged its reputation with customers.