The credit card company believes its mobile repayment service could revolutionize how we borrow or lend money to friends and colleagues.
Tired of lending a tenner to a colleague at lunch and never getting it back? Visa this week launched a new mobile-to-mobile service where borrowers can repay money instantly to your phone.
The credit card provider says that the service could revolutionise how we borrow or lend small amounts from, and to, each other. There will be no need to tap in sort codes and account numbers. The money can simply be transferred to anybody listed in your mobile phone address book.
The drawbacks? First, you have to have an Android-based smartphone (not an iPhone), and download the app. Second, you won’t be able to do this until next year. What Visa has launched this week is the facility for individual banks to start marketing their own money transfer services over the Visa network. A spokesman says UK banks are expected to be at the forefront of the initiative, which will be available across Europe, with the first services likely to be unveiled early in 2012. A possible hook-up with iPhones is mooted for later that year.
Industry experts said that the move could be seen as Visa pitching itself as a rival to PayPal, with the added bonus that the recipient of cash doesn’t have to be registered with the scheme.
Peter Ayliffe, chief executive of Visa Europe, says it will take the hassle out of friends and family exchanging money, “whether it’s £20 borrowed for a taxi ride, an easier way to split a group restaurant bill or sending some funding to a student at university”. He adds that the transactions will carry the same level of anti-fraud security that covers other Visa money transfers.
The development of “wave and pay” technology – based on a microchip containing credit and debit card details – is likely to lead to mobiles being used increasingly instead of cash. In view of this, the Payments Council is undertaking a major project aimed at making payment by mobile “as easy, efficient and secure as any other way to pay”.