Paym: the UK's mobile payment system

Issue 38 | 30 July 2020 (Web version updated 30 September 2020)

In this week’s subscriber edition of Payments, Payments, Payments we unpack the UK’s mobile payment system: Paym.

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Source: BBC 2014.

Paym is a mobile payment system operated by Pay.UK and offered by the majority of the UK’s banks and building societies. Recipients are 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 has since increased following support from more banks including Clydesdale Bank, Royal Bank of Scotland Group (now Nat West Group) and Nationwide.

Since launch over 5.7 million people have registered to use Paym, more than 90% of UK current accounts are now able to support the service and over £1.76 billion has been transferred via Paym.

Following launch the Paym service was initially operated by Faster Payments Scheme Limited and subsequently has 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.

Perhaps a bit of an unsung hero, Paym is an example of an early overlay service that reduces friction in payments.

What is 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 does it work?

The Paym website provides a simple explanation of our the service works:

As you’ll see from step 4 if the person you are paying isn’t registered for Paym they will receive a text prompting them to register for the service. As soon as they have registered you can send the money again and it will now arrive in their bank account.

How do I send some money?

Paym is accessed via your online banking app, whilst the underlying Paym service is the same the process to set up and use Paym varies between banks.

Here’s how Paym works for Nat West customers:

What if my bank does not offer Paym?

Although Paym has a high coverage rate across UK current accounts not every bank subscribes to the service.

Some banks offer alternative options although sending a payment with these solutions may be limited to payments where both the sender and the receiver of the payment has an account with that institution. Although receiving a payment from a different bank may be a little more flexible.

For example, lets you send and receive money without needing to know the other person’s account details. You can send money to anyone with a Monzo account through it, and receive money from anyone – even if they don’t have Monzo. To send money, all you need is the person's username. And you’ll need to give your username to anyone who wants to send you money. The money moves instantly, and it’s totally free.

Benefits of Paym

The Paym website lists the following three key benefits of using Paym to pay your 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

What if I change my bank account?

If you change your bank account using the Current Account Switch Service (CASS), it is the responsibility of your old bank to de-register you from Paym on your old account as part of the switching process.

Once the switching process has been completed, you can contact your new bank to re-register your mobile number for Paym on the new account.

In brief

  • You can normally send up to £250 a day via Paym although your bank may adjust this limit.

  • With most banks you need a smart phone to send a Paym payment but only need access to your online banking via a web browser to register to receive payments via Paym.

  • When sending a Paym payment through your bank app you will be asked to verify the recipient - this will help you ensure the money gets to the intended person.

  • Some banks allow business to receive Paym payments.

  • Only one bank account can be connected to a mobile phone number to use Paym although you can register more than one mobile number to a joint account

  • It is not possible to send a payment to a mobile number that has not been registered for Paym, so no money will have left the sender’s account. The sender will need to find an alternative way to make the payment unless the recipient registers for the service.

  • The payment is sent via the Faster Payments system and can take up to 2 hours although most are received within seconds. For some accounts this could take longer than two hours so you should check with your bank or building society


Over 5.7 million people have registered to use Paym, more than 90% of UK current accounts are now able to support the service and over £1.76billion has been transferred.

Since its introduction in 2014, Paym has certainly addressed payment friction when settling up after a night out or quickly sending a family member some money.

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.

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