UK mobile P2P platform Paym reports growth in transaction volumes

The ability to transfer funds using just a mobile phone number is growing in popularity in the UK, as national P2P service Paym reports a near-doubling in transaction volumes over the past six months.

Paym has registered 3.25 million mobile phone numbers on its database since it launched in April 2014 with the backing of banks servicing nine out of ten current accounts in the UK.

More than £146m has been sent using Paym since launch, says the firm, with more money sent in the last six months of 2015 than in the previous twelve months. In total 1.46m payments totalling over £76 million were sent in the second half of 2015 compared to 774,628 in the first six months - an increase of 89%.

Moreover, the average transaction value of a Paym payment dipped below £50 for the first time in the last three months of 2015, with £49.48 being sent on average, suggesting a move towards the service being used more often for smaller, everyday amounts.

Petrol money, splitting bills, IOUs and other household costs remain amongst the most popular reasons to use Paym, according to customer research by the firm, while 13% of users have paid a small business using their mobile number.

“Paym makes settling up with friends, family and even small businesses easy - all you need is their mobile number, so it’s no wonder the service is becoming more popular," says Craig Tillotson, chairman of Paym. “It seems plenty of people have cottoned on to using their contacts for more than calls and texts"

Channels

Retail banking Payments

Keywords

Mobile & online banking

Comments: (4)

Jeremy Light - pingNpay - London 09 February, 2016, 15:29

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These figures, together with others published by Paym last August, show Paym volumes were 2.2m txns in 2015, growing at 40%+ per quarter, or over 300% p.a.

Coincidentally, I blogged on Finextra some predictions yesterday that forecast Paym txns to be 2m txns in 2016. I would like to say I meant 2m txns/quarter, but my sums were wrong, and at these growth rates, 9m Paym txns is a more accurate target for 2016.

Contactless card txns have grown consistently at 200% - 300% p.a. in the UK and Europe for at least 5 years, demonstrating how network effects can persist and take hold in new payment methods. I believe the same is happening with Paym, and if so, we could quite easily see over 1bn Paym txns p.a. in 2019/2020.

As evidence that this is realistic, Venmo in the US, Swish in Sweden and MobilePay in Denmark are mobile P2P services each with high volumes and growth.

Assuming the opening up of direct access to the FPS infrastructure also extends to Paym, then we can expect to see some great innovations in P2P payments and payments addressing from both challenger banks and non-bank PSPs over the next few years, as well new investments from mainstream banks as they see Paym usage grow.

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Robin Setty - ACI Worldwide (EMEA) Limited - Watford 10 February, 2016, 11:06

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One of the key benefits of PayM (which a normal faster payment doesn't provide) is that users can be sure that they're sending their money to the right person. However, at the moment, PayM can only be provided by institutions that are directly connected to the FPS infrastructure. Otherwise, the payment is simply too slow to satisfy the 'instant' expectation of a PayM user. 'Challengers' ought to be well positioned to take advantage of mobile technology, so it's vital that open access to the FPS infrastructure is accelerated. If so, PayM could become the de facto method for P2P payments in the UK.

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Tom Hay - Payment Systems Europe - London 10 February, 2016, 13:02

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PayM still reflects a very traditional mindset - "go to a banking app to make a payment". Compare that with popular US P2P payment methods such as Venmo, which operates a its own social network, or Facebook which has integrated peer-to-peer payments into its Messenger app, or ChangeTip which works across a range of social networks. Which is more likely to appeal to the digital generation? Far from becoming the de facto standard, there is a risk that PayM will become the MySpace of peer to peer payments.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 10 February, 2016, 18:43

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From personal behavior, I tend to agree with @TomHay. I found little value in my Mobile Banking app and uninstalled it within a few days of downloading it. On the contrary, the bill payment app from the same bank has been a Godsend and I use it several times a month (HDFC Bank's PayZapp Ends My Bill Payment Woes). Had PayZapp been a feature in HDFC Bank's Mobile Banking app, I wouldn't have bothered to go through the friction of opening the Mobile Banking app, locating the PayZapp feature inside it, all the while being bombarded by notifications that I'm not interested in.