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New scheme to allow money transfers by text message

 

Individuals will be able to send and receive money via a text message when a new mobile payments service launches next year, it has been announced.

 

The new service will allow users to make secure payments directly to or from an account without the need to disclose the sort code and account number, with only a mobile phone number used a proxy.

 

Eight financial institutions, representing 90% of UK current accounts, have already committed to offering the new service from spring 2014.

 

To help prevent abuse of the system, the Payments Council has confirmed that a passcode or similar security feature will be required to authorise payments. Payment amounts will also be capped for added security.

 

Commenting, Adrian Kamellard, chief executive of the Payments Council, said: ‘This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details.’

 

The scheme will be managed by the Faster Payments service, which processed more than 800 million online and phone banking payments in 2012.