The Payments Council is to introduce an enhanced account switching service which will enable consumers to switch all aspects of a current account within one week. The enhanced service will be introduced in September 2013.[From Payments Council to enhance account switching service – Transact]
This is going to cost the industry something in the region of £750m. A waste of money to my mind. I’ve written before about what the industry should have done, which is to create a virtual sort code and account number that customers can switch to wherever they like: that way, they give their employers and whoever else a single sort code and account number which never, ever changes, Then, if they want to switch bank, they re-route the virtual account and there’s no need to notify billers, counter parties etc to update their databases. Much simpler. But whatever.
Meanwhile, The Payments Council are working on a more interesting and potentially useful project linking bank accounts to another identifier. They say that market research suggests that one in four UK adults would use something like PingIt, so they are planning to go ahead with the central database to link sort codes and account numbers with mobile phone numbers towards the end of this year. I still think the basic architecture is wrong — the central database should map a unique financial services identifier (“Pay Name” or whatever) to sort code and account number as well as mobile phone number — but nevertheless a universal PingIt will be an important addition to the toolbox.
The easiest way to do this would be to assign a unique financial services identifier (FSI) to a person or other legal entity the first time that they go through a KYC process[From Could bank account numbers be portable like mobile numbers?]
In the general case, payers should enter the payee’s “Pay Name” (e.g., £dgwbirch or £chip.com or £donations@oxfam or whatever) rather than a mobile phone number. The Payments Council should sell vanity Pay Names to fund the development of the system and to keep it free to users. I’m sure some far eastern oligarch will cheerfully stump up a million or two to own £007 and I’m sure that even in these straightened time the forward-thinking finance director of Consult Hyperion could be persuaded to spend a few quid on £chip.com and so on.
I remember talking with a couple of bankers at the Experian Payment Strategies Conference earlier this year and they agreed with me (otherwise I wouldn’t, naturally, be reporting their opinions) that it makes more long term sense to build the Financial Identifier Database (FID) and use mobile account-to-account (A2A) as the first application than to build the mobile phone database and then scrap it again downstream, but I suppose it’s natural that the idea of the mobile phone number as an identifier is the dominant meme right now and therefore it has been a strange attractor for identity proxies.
Fighting technology with technology seems most promising—by replacing ID cards with phones.[From Fake ID cards: Identity crisis | The Economist]
Yes, the mobile phone is set to be the remote control for cloud identity, the mobile is a vehicle, a carrier for personal identity (identities, in fact) not the identity itself. It provides an excellent authentication mechanism and a super place to store keys in tamper-resistant hardware, but your mobile isn’t you.
These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers