SENDING money to family and friends is about to become a lot easier.
Forget cheques or lengthy online log-ins, all you need is a mobile phone and a current account.
A new payment service Paym (and pronounced “pay em”), preparing to launch later this month, eventually aims to link up every current account in the country with a phone number, letting you send cash to someone else simply by using mobile phone numbers, not a person’s bank account details.
Similar mobile payment services already exist, but the Payments Council, which is overseeing the initiative, says this is the first industry-wide collaboration in the UK which could potentially link up every bank account with a mobile number - by the end of the year, they say around 40 million people could be using the service.
Research by the Payments Council estimates that across the UK, we advance a total of £12.6bn in informal ‘IOUs’ every year to help loved ones and acquaintances out financially, and that every adult lends around £255.81 in informal IOUs each year - that’s £4.90 each, every week.
People typically approach their family for “practical” loans, and more than half (56 per cent) of loans handed out are estimated to be between family members, with a large chunk of this cash coming from the “bank of mum and dad” for some “substantial” purpose, such as to help out with bills, household costs and debt
“Leisure” related IOUs, however, are more common between groups of friends, including informal spending on drinks, meals and transport fares. This “treats and favours” culture was particularly common among younger people, with nearly two thirds (62 per cent) of 18 to 24-year-olds saying they have lent money to close friends for a drink in a pub or a bar.
Although friends seem very willing to lend to each other, larger sums of money tend to be handed out between couples, according to research.