Delivering mobile payments to every bank account in the UK

Isn't this a bit late? I thought this was meant to happen this year and now we are told it's next year. THere are lot of questions being asked about the security and reliability of the system and whether the size of the database that is going to be big enough. 

Why is is taking so long? The lukcy peopke in Kenya have had a similair servivce for 6 years now and yet, here, we still wait for what will I suspect given the actors involved, a cumbersome, over engineered, costly servive that no-one really wants and when it does lauch will be lost in it's irelevance. 

I'd dispute the assertion that this is a service no-one wants.  The Payments Council commissioned a piece of research amongst over 5,000 consumers in the UK.  One in three of those consumers who had a smartphone said they were either "definitely" or "extremely likely" to sign up to the new service at launch, so there is definite demand out there.

Of course it would have been great to launch the service earlier, but nevertheless this is a major step forward.

Regarding Kenya, M-PESA is a great product, but it succeeded because of the particular dynamics in that country.  We are not in Kenya (which is a pity considering the temperature outside my office at the moment)

There's simply no comparison between this and M-PESA. The UK system is open-loop, works across multiple banks, will hopefully be MNO-agnostic, involves no cash and is, above all, an extension of the pre-existing online A2A transaction type to the mobile phone form factor. M-PESA is closed-loop, is used by people in lieu of bank accounts, works only on one MNO (Safaricom), is used primarily for cash transfers between Safaricom's customers. 

Given that Barclays have publically stated they have taken inspiration from mPesa for Pingit, I think the comment has some validity. I'm agree that anyone working in the payments industry would say that that the Vocalink proposal is nothing like mPesa, but I have not doubt that the the press will make the comparison. 

How many people would even even start to comprehend what "an extension of the pre-existing online A2A transaction type to the mobile phone form factor" unless they work in payments? None I suspect. 

But ultimatly, what is the Vocalink system if not a cash transfer albeit from a debit account, to another debit account? It's cash being moved under a different name. So actually, there is some valid comparison to M-Pesa and I agree with the original comment in that respect. 

Ultimately, everything is money, but at the level of channel and method of payment that we're operating in, cash and A2A are significantly different, if for no other reason than that A2A requires bank accounts and cash does not.

Here's one the press and the average John Doe should be able to understand: "With VocaLink's new mobile payment system, you can send a payment to anyone in the UK. With M-PESA, you can only send a payment to a Safaricom subscriber." This is not a problem in Kenya where Safaricom has >70% market share but it's a big limitation in UK and many other countries where no single MNO has such a dominant share of the market. Incidentally, M-PESA failed to take off even in the neighboring Tanzania. Likewise, M-PAISA, its Indian version. Not to undermine M-PESA's achievement but it's hardly a lighthouse for the whole world.

M-Paisa in Afghanistan has done very well with merchant payments, loan disbursements and transfers. 

With 9million subscribers M-Pesa in Tanzania is doing pretty well. 

India has special circumstances due to the rules set in place by RBI that affect MNO's and financial services. 

I am just wondering the operatioanl difficulities in mainiting this database. How on earth is one going to link sort codes with Phone numbers . I also don't understand whether the payment schemes now would use phone number for routing or would let the banks keep a copy of the Vocalink database (aka ISCD ) and let them do all the hardwork of matching phone numbers to sortcodes. Its going to be operational nightmare . 

The operation of the database is relatively straightforward. 

VocaLink will maintain a look-up table that matches a customer's mobile phone number to their sort code and account number and/or the PAN from their debit card.  A query on that database will look up the mobile number and then return the sort code/account number or the PAN, which will then be used to generate a payment using either Faster Payments or the LINK network.

@Chris Thanks for the reply. I am trying to find answers to these questions

1) What is the source of data for Vocalink . Is it the banks and credit societies themseleves who will provide the data . Or is there a seprate body to be formed where participants in the service have to register their phones and bank details.

2) What happens if the same mobile number is linked to two accounts in two differnet banks. I personally had my same number registered with both Barclays and HSBC .

3) How often is will the database be updated to reflect changes in moblie numbers and accounts

There is no comparison between the UK system and M-Pesa, the UK system has clear advantage as it is A2A transfer, this will get acceptance by the monetary/regulatory authority with regards to the security and AML compliances etc. Beside payment system operated by MNOs are OK for very small value transactions in an underdeveloped banking system.

Is there Pune consipiracy to all say the same thing? 

Barlclays took inspiration from M-Pesa for Pingit. The Vocalink offering will extend what Barclays are doing to 7 other banks with more to follow no doubt. Therefore there is comparison to be made in that the Vocalink offering resonates with M-Pesa.

@FinextraMember: Not just Pune, OFSSL - my ex-employer - is another thing in common. But, appearances can be deceptive - I promise that there's no Pune conspiracy :-) Not sure whether PingIt supports transfers from/to non-Barclays accounts now but when it was launched, it only supported payments between Barclays accounts i.e. it was closed-loop. That that extent, if somebody from Barclays said PingIt took inspiration from M-PESA - another closed-loop system - it's understandable. However, the VocaLink system runs on a separate platform, it's open-loop, it can't be treated as an extension of PingIt, hence I don't find it resonating with M-PESA.