Paym: (formally) the UK’s mobile payment system

Pay.UK have announced that Paym is to permanently close in March 2023. 

Low use and new technology seem to have driven the decision but why, in an age of obsessive mobile phone use, did the UK’s mobile payment service fail to take off? 

What happens to current users and what lessons can the UK’s payment industry learn from this?

Listen to Enryo’s David FaglemanDavid Hensley and John Maynard the former Head of Development at Paym as they unpack Why did Paym fail?

Listen: Why did Paym fail?

Paym enters the Payments Museum of Curiosity

As Paym is consigned to the Payments Museum of Curiosity here’s a quick resume of the service for the history books.

“Pay ‘em”, “Pay Them”

Paym was a mobile payment system operated by Pay.UK and offered by the majority of the UK’s banks and building societies. Recipients were identified by their mobile phone number rather than their bank sort code and account number.

Launched by the Payments Council in 2014, the service initially went live with a wide range of banks and building societies including Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, Lloyds Bank, Santander and TSB.

Paym’s coverage increased following support from more banks including Clydesdale Bank, Royal Bank of Scotland Group (now Nat West Group) and Nationwide.

During its lifetime over 5.7 million people registered to use Paym, more than 90% of UK current accounts were able to support the service and by 2020 over £1.76 billion had been transferred via Paym.

Following launch the Paym service was initially operated by Faster Payments Scheme Limited and subsequently became part of the UK’s retail payment scheme operator – Pay.UK.

There are a number of interpretations on the Paym name – “Pay ‘em”, “Pay Them” or pay by mobile.

Although perhaps a bit of an unsung hero, Paym was an example of an early overlay service that reduced friction in payments.

What was Paym?

Paym helps you pay your mates back quickly and easily using your current banking app. Forget asking for your mate’s sort code and account number (they probably won’t know either) and no more searching for a cash machine in the rain to settle up (not to mention the queues). Paym lets you pay back your family and friends using only their mobile number.

Oh…and it’s 100% free!

How did it work?

The Paym website provided a simple explanation of our the service worked:

Sending money via Paym

Paym was accessed via an online banking app, whilst the underlying Paym service was the same the process to set up and use Paym varied between banks.

Here’s how Paym worked for Nat West customers:

Benefits of Paym

The Paym website listed the following three key benefits of using Paym to pay friends and family:

  • No sort code or account details: That’s right, no need to remember or ask your friends for their bank details! If you’ve registered to pay a mobile contact in your banking app (and the person you’re paying has registered as well) you’ll be able to pay with just a mobile number.
  • Secure payments: Paym is offered by 15 banks and building societies, so when you make a payment by Paym you get the same high levels of security you are used to from your bank or building society.
  • No downloads needed: How many apps do you have already? Don’t worry, you don’t need to download another one – you’ve already got it – Paym is already in your banking app.

Surpassing the Paym offering

Our first explanation of Paym was in issue 38 of the Payments:Unpacked newsletter published back in July 2020 – it seems that the final words of the briefing were quite forward looking regarding the 2023 demise of the Paym service:

Alternative payment overlay options (such as have been developed by challenger banks.

It is likely that new payment options such as Ordo and the anticipated new Request to Pay solutions may provide better payment options over time.

Also, the New Payments Architecture will be based around the premise of stimulating competition via the development of overlay services and the further development of Open Banking is likely to lead to a plethora of frictionless push and pull payment options that do not require the recipients sort code and account number to be visible.

Maybe these solutions will ultimately surpass the Paym offering but, for now, Paym provides a secure and friction free way to pay a mate for last night’s pizza in an increasingly cashless and digital payments world. 

Payments:Unpacked (30 July 2020)

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