Payment, like everything else, is constantly evolving.
We used to trade cereal grain and livestock, but we’ve moved onto cash, cheque and card.
But payment has continued to evolve so today you can pay by text, you can pay in an entirely digital currency…heck, you can now even pay with Twitter!
But is it safe?
Who’s doing it?
Should you pay by these new methods?
Read on to find out!
All you have to do is register with Paym through your bank and connect your current account to your mobile phone number.
From then on you can make payments into your friends’ accounts, and they can make payment into yours, just by entering their number – no sort number or account details required.
It’s great for things like paying for a meal at the end of an evening with friends. We all know the awkwardness of paying too much and being too shy to request the exact change but with Paym there’s no excuse – if you’re all signed up you can pay into each other’s accounts the exact amount with ease.
90% of current accounts can sign up to Paym so if you think it’s something that would be of benefit to you then go for it!
How safe is paying by phone?
Paying by phone should be safe as it’s been developed by the UK’s leading banks and building societies to meet their high security levels.
Should your phone get stolen, no-one will be able to access your details without a password for the app – although you should obviously notify your bank straight away.
Should you pay by phone?
If you’re the kind of person who runs their life with their phone then using Paym will probably be a revelation.
As mentioned above, it can make life a lot easier when doing things like dividing bills.
However, for the social media fan they’ve gone one better – instead of using the mobile number of the person you’re paying, you can instead just use their Twitter handle!
All you have to do is link your Pingit account to your Twitter account and you’ll be able to make payments of up to £1,500 a day in just three clicks!
How safe is paying with Twitter?
Paying by Twitter is more or less the same as paying by phone, you’re just switching the phone number for a Twitter handle – and so should be considered a reasonably secure way of making payments.
The important thing is, of course, to make sure only you have access to your Twitter account. The one downside to these multiple payment methods, particularly with social media, is it means multiple ways of fraudsters getting their hands on your details – if you do use this method make sure you have a strong password!
Should you pay by Twitter?
Again, it’s really just the same as paying by phone – the Twitter aspect is just a nice but non-essential gimmick for those who love to tweet.
If you know your friends’ Twitter handles better than their numbers then this is for you.
Users will be able to select a special pay option where you can then select a friend and the amount you’d like to pay.
You’ll need to have your payment details on Facebook to do this and if the person you’re sending the money to doesn’t have their payment details attached to their account then Facebook will hold onto the money until they’ve set it all up.
This will only be available in the US initially, but we don’t expect it’ll be long until it comes our way.
How safe is paying by Facebook?
Although we in the UK can’t do it yet, paying through Facebook should be safe. Many people already have their bank account connected to Facebook to make payments for things like Facebook ads.
There’s always a certain element of risk when you hand over details to a company and, as with Twitter, it’s vital you remember to be extra careful with your social media log-in details if you use this method – having a friend take over your account and write a funny status is one thing, having a fraudster use your account to steal your money is another!
Should you pay by Facebook?
Well at the moment you can’t even if you wanted to. But when this, almost inevitably, does come to the UK, then only you can decide whether you feel comfortable connecting your profile to your bank account for the sake of convenience.
Our advice – wait for any security issues to be sorted out before jumping in once it becomes available.
To begin trading bitcoins you can either purchase some or receive some as payment.
Payment is easy, you simply open up a wallet app on your computer or phone, enter in the details of who you want to send the payment to and press send.
Perhaps the biggest advantage of using Bitcoin is there are no limits or fees – you can transfer money to anyone, anywhere at any time without restrictions or expensive fees.
Bitcoin is still in its early stages and so there are still some rightful anxieties about exactly how safe it all is.
Nevertheless, Bitcoin may well be the start of a future of digital currency – to know for sure, we’ll have to wait and see!
How safe is Bitcoin?
Whilst digital currency may well be the future, Bitcoin is one specific digital currency and therefore there is risk.
The Bitcoin’s value is entirely determined by the market and whilst its value has usually gone up, but it could potentially crash – for example government’s could put pressure on Bitcoin users to stop because it’s costing them money in unpaid taxes.
You also don’t have the same protection when making purchases with Bitcoin aren’t going to be as likely to help you get Bitcoins back as they would with cash.
Basically using Bitcoin is a bit of a gamble – so far it has been strong but be aware that you would be taking a risk.
Should you be using Bitcoin?
Really it’s entirely down to how much you’re willing to risk.
There are advantages to Bitcoin – payment is easy and there are no transfer limits or fees – so it could come in handy.
However, given the various risks involved it would be wise not to put too much money into Bitcoin at this moment unless you’re a real risk taker with absolute belief in the Bitcoin – like any investment, it might make you rich…or it might not!
All these new digital and social ways to pay are really interesting and likely to be good for businesses – large and small – but they all have security issues in my opinion. Crypto-currencies particularly are very open to hacking and we have heard of many ways that fraudsters can get into social media accounts, so you should be wary of these new ways to pay and possibly wait until they have ironed-out issues before launching in yourself.
Most people will be familiar with an Oyster Card, which you load up with money and then tap in and out when travelling on the Tube or other forms of transport.
Now many credit and debit cards are becoming contactless, so instead of having to load up an Oyster Card you simply use your regular card to get around.
You can also use your card at shops which allow contactless payments.
And some phone companies are even allowing you to use your to tap in and make payments, for example the EE ‘Tap to Travel’ scheme.
How safe are contactless payments?
Well, according to Visa, a lot safer than carrying around cash!
While anxieties about contactless payments are understandable – it’s only natural to be suspicious of transactions that only requires a tap – it’s actually very safe.
For a payment to be made the card has to be within 10cm at least and in some cases it can be as close as 2cm – so don’t worry about making payments just walking around!
Equally some people are frightened that, should they lose the card, they are handing a blank check to fraudsters, which is understandable.
This is not the case, however. The card can only be used a set number of times before a PIN is required, each transaction is usually a maximum of £20 and, like any other transactions, your bank will be looking out for abnormal behaviour.
Should you be a victim of fraud you will also be protected against fraud loss so long as you let your bank know you want it.
Should you be making contactless payments?
If you think it would make your life easier then why not?
It’s particularly good for travelling because you’re not going to run out as may happen with an Oyster and equally you won’t lose money by putting more money on an Oyster card than you need!
Payment methods that have been around the block
Can you remember the last time you wrote a cheque?
I’m guessing that it was a while and that you write FAR fewer now than you used to.
With easy and instant bank payments around there’s less and less reason to write a cheque or get cash out.
But it’s easy to get confused by the newish terms for transferring money via your bank.
Here are a few of the most commonly-used methods.
Well, BACS is actually the central payment system used for a variety of different electronic payments.
Direct Debits or Direct Credits (largely used by companies to pay salaries, pensions etc.) make up the vast majority of BACS payments.
Until 2008, BACS was also the method used to make one-off internet and phone payments – it takes three working days for a BACS payment to be processed.
However, Faster Payments are…well faster, and will let you make these type of payments nearly instantaneously, 24 hours a day, seven days a week and so are now used for the vast majority of these types of transactions.
Not all accounts (such as saving accounts or deposit accounts) allow you to send Faster Payments and so BACS is used in some cases.
The service was launched in May and payments are typically made by phone or internet banking to transfer money between accounts – Faster Payments is now the default way of doing this.
If you’re using Faster Payment, it’s important to make sure you use the right sort code, account number and name of the person/business you want to pay because payments can’t be cancelled when made.
If you enter in the wrong details it could end up in the wrong person’s bank account and you may struggle to get it back.
You will also need to give a reference when making any online or phone payment so that the person or company who is receiving your payment will be able to see what it’s for.
The limit to how much you can transfer this way varies between banks but some allow payments up to the value of £100,000.
Originally standing for ‘Clearing House Automated Payment System’, now it’s only referred to by its acronym.
It can also be used by individuals but it’s quite expensive, with banks able to charge as much as £35 for a transfer.
As it is for high value transfers it’s often used by solicitors to transfer payment for homes between bank accounts and by mortgage lenders issuing advances.
The speed of CHAPS payments, made within a day, are the main attraction – banks themselves use it to transfer money.
Although individuals can make CHAPS payments, it is best to check with your bank how much can be paid using Faster Payments as that is a much cheaper method!