The UK Payments Council has released early details about Paym (pronounced ‘Pay-Em’), its person-to-person (P2P) mobile payments service, which will launch on April 29. Initially available to customers of nine UK banks, Paym will allow consumers to link a current account with a mobile phone number to make mobile payments.
With the potential to link every UK current account with a mobile number, Paym will be integrated into customers’ existing mobile banking or payment apps as an additional way to pay, making it possible to send and receive payments using just a mobile number.
Paym will be available to 40 million UK current account holders by the end of 2014, with early forecasts suggesting that as many as one billion Paym payments will be sent by the end of 2018.
“Paym will make it easier to repay a friend for cinema tickets, split a restaurant bill or settle up for a colleague’s birthday collection,” said Adrian Kamellard, chief executive of the Payments Council. “Paym is a great example of industry-wide collaboration that delivers tangible benefits for customers.”
Although PayPal has been offering P2P payments for some time, the anticipated launch of Paym galvanizes the role of mobile payments in mainstream consumer banking.
Implications for UK banks
Paym represents a payment solution that is both convenient for consumers and cost-effective for banks. Let’s explore the opportunity that Paym presents in driving enhanced profitability and a superior customer experience within consumer banking:
Cost-to-serve. Making it easier to execute P2P payments will further fuel the migration from traditionally more expensive alternatives, such as cash or cheques. Also driving momentum will be an understanding of the relationships between different products, promoting the most appropriate products to customers (based on price, ease of use, relevance or other factors) and supporting these with differentiated and channel-based pricing. Imagine being able to identify customers who write or receive large numbers of cheques from friends and family and offering them temporary discounted pricing as an incentive to adopt Paym.
Couple this with a targeted loyalty program that rewards the use of higher Paym payment volumes. For example, if a customer maintains a minimum current account balance and makes a minimum of five Paym payments per month with no cheque payments, he or she will be entitled to a choice of three reward options, including free mobile phone insurance or roadside assistance.
Segmentation. Use Paym as a driver to segment customers based on a preference to bank exclusively online or via a mobile device or other channels. For example, consider bundling a current account (with a selection of applicable online/mobile features) together with unlimited P2P mobile payments, a credit card and a “Millennial-friendly” loyalty program to create a low-cost, online/mobile only offering catering specifically to students or young professionals.
Similarly, Paym is also ideal for parents who need to make small payments on a regular basis on behalf of their children, such as bill payments, activities and allowance.
These examples are possible when you empower your Product and Relationship Managers to innovate with Product and Pricing Lifecycle Management.
For more information on how miRevenue can deliver complete Product and Pricing Lifecycle Management for your banking needs, please contact us at email@example.com.