If you are anything like me, you will find that you transfer money to friends and family on an almost daily basis. What a hassle! However, there is a brand new service which now makes this process an absolute doddle: Paym
How often do we transfer money to friends and family?
In my experience, the need to transfer money to friends and family is becoming more and more common, and the research backs this up.
Think about all the times that a mate lends you a tenner in the pub and you need to pay them back. Friends organise trips away and stag/hen dos and you need to pay them back.
According to recent research carried out by Paym, parents with children aged 18-25 lend them £31 each week. With children at University, this will usually be done via bank transfer as well.
Furthermore, the IOU UK report has shown that more than £12.6bn is outstanding in IOUs in the UK. More research has shown that people are most relaxed around lending to people they know best with 89% saying they would feel comfortable lending £5 to family and friends and 49% would be comfortable lending £50.
People are less comfortable lending larger amounts to people we aren’t as close to, such as colleagues or neighbours, with only 21% saying they are relaxed with amounts of £20 or more. However, this is still a lot of money which needs to be transferred!
How do we currently transfer money to friends?
Let’s take a recent personal example. I booked flights for myself and 15 friends to go down to Bristol next weekend. So I needed to get £50 back from fifteen different mates.
Currently, the best way I can do this is to send an email to all of these friends with my bank details asking them to make a transfer. They can then directly transfer me the money.
However, there are clearly issues with this approach:
- I send my personal bank details via email to 15 people. This is open to potential security issues whereby the email may be intercepted or seen by another party whilst I am sending it. Alternatively, I might send my email to erroneous email addresses.
- These 15 people then have to open the email and enter the information on their banking website in order to make the transfer. Again, this is open to potential security flaws and my bank details might become compromised.
- When entering the bank information, your friends might accidentally get one number wrong and the money transfer may be made to someone else’s account. In this scenario, current regulation essentially means that this money is lost and will be very difficult to recover.
- It takes a lot of time. Each of your 15 friends need to go into their banking program, transfer the money, enter all the details and more often than not go through additional security procedures in order to transfer the money. Arduous to say the least.
Paym – The new alternative
Paym is a new and innovative free service which allows you to transfer money to your friends on your mobile. The beauty of Paym is that, once you and your friends have registered to the service, you can transfer money to friends through the existing app provided by your bank or building society just by knowing their mobile number. It’s like sending a text message, but with money transferred. This means that you will never have to ask anyone who is also registered with Paym for their account number or sort code again and by the end of the year it will be available on more than nine out ten current accounts
At first, this sounded like it would be less secure. But, when you think about, the benefits are obvious. Your friend has registered their bank account details to that phone number via their own banking software. Therefore, by selecting the transfer to this phone number (which you already have), you can credit their account in a matter of seconds. You will also receive a pop-up which checks the name of the recipient to double check that you are making the transfer to the right person before making it.
Paym is simply an add-on to your usual banking service. Currently, Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, First Direct, Halifax, HSBC, Lloyds, Santander and TSB all provide the Paym service. By the end of 2014, NatWest, Yorkshire Bank, RBS, Ulster Bank, Isle of Man Bank and Clydesdale Bank will all have joined suit. For more information on participating banks, and general information on signing up, check out the Paym FAQs.
Paym makes the whole process of transferring money to friends on your mobile much quicker. If you want to register, follow this link to Paym to see how you can register directly with your bank or building society.