Save money with your smartphone
In the early 1980s, mobile phones were a luxury only the rich could afford. Some 30 years later, not only are they cheaper but the technology is now so super-fast and accessible that we can do virtually anything we want on the go. Such is their popularity, communications regulator Ofcom says 40% of adults in the UK now have a smartphone.
Today, a vast array of apps promise to help us streamline our lives. Unsurprisingly, they include apps for managing our money.
At the end of 2012, 29% of smartphone users were using their mobile phones for banking, according to a study by digital banking software company Intelligent Environments. And by 2017, UK banks believe everyone will be mobile banking in some way, according to a study by Avanade, a provider of business technology solutions.
"Mobile banking is increasingly becoming a customer need - moving from being a 'nice to have' to an essential part of a bank's offering," says Nic Merriman, chief technology officer for financial services at Avanade UK. Most high street banks offer free mobile banking apps, the majority of which give you access to your bank account.
At the basic end of the spectrum, HSBC provides an app called Fast Balance, which you can use to view your accounts, including the last six transactions, and top up your phone. However, most banks offer their customers apps that have a whole host of other functions.
WHAT'S ON OFFER?
First Direct and Santander's apps allow users to make transfers between accounts and payments that have already been set up using online banking. Both apps are only available to iPhone users but First Direct and Santander have mobile-friendly internet banking pages that can be easily accessed by Android smartphone users.
For customers of Halifax, Lloyds TSB or Barclays, you can download an app that locates your nearest branch or ATM, as well as enabling you to make transfers to existing payees and view your accounts and previous transactions.
The Lloyds TSB app lets you set up new payment recipients while on the go, view your mortgage balance, manage your overdraft and even apply for the bank's Internet Saver account.
Comparison of apps from the big banks
|Bank||iPhone||Blackberry||Android||View balance||Transfers||Other options|
|Co-operative Bank||YES||YES||YES||ATM finder|
|Halifax BS||YES||YES||YES||YES||YES||Add new payees|
|Lloyds TSB||YES||YES||YES||YES||YES||Add new payees|
Many apps also allow you to pay with your phone, with 'mobile wallets' set to be the next big banking-app trend.
Barclays Pingit - separate from the standard Barclays banking app - means anybody can send and receive money for free via text messages. You can send up to £750 a day using the Pingit app, which is available on Android, iPhone and Blackberry. In addition, Vodafone, O2 and Orange have mobile wallet applications you can download for free.
The O2 wallet works like a pre-paid card. It's available to smartphone users on any network and it allows you to send money via text messages and compare prices on the go by using barcode scanning and internet comparisons.
You can't use it to pay in shops yet but this is likely to be possible in the near future. Sending 'money messages' is free for the first six months, but then you will be charged 15p per message. After 31 December it will also cost £1 to make same-day transfers out of the wallet.
The Vodafone mobile wallet enables users on any network to wave their phone over contactless payment points to pay for their shopping, worth up to £15.
Meanwhile, Orange QuickTap, powered by Barclaycard, is currently only available to Orange customers with the new Samsung Galaxy SIII, who also have a MasterCard or Visa credit card. But it allows customers to make contactless payments under £20 using their phone.
If you have a Visa payWave, MasterCard PayPass or American Express ExpressPay card you can already pay up to £20 with just a wave over a card reader. And if you have a Barclaycard, you can get a small contactless payment card to stick to the back of your phone, called a Paytag, which does the same thing.
Contactless payments are certainly the centre of mobile banking innovation at the moment. Indeed, NatWest, RBS and Visa have teamed up to trial NatWest TouchPay in the UK. The app - for the iPhone 4 and 4S - uses a special phone cover that enables users to make contactless payments of up to £20 direct from their current account.
The trial has only just started and a release date for the technology is yet to be confirmed.
In the meantime, we can expect to see more banks and phone networks expanding their range of apps. And some mobile wallet apps such as the Google Wallet and T-Mobile ISIS, which are already available in the US, should hit the UK soon.
The mobile wallet market in the UK is expected to expand dramatically over the next few years. Duncan Spencer, managing director at Insurance2go, says: "I'm confident that within the next three years the mobile wallet will replace credit cards as people's preferred payment method."
PROTECT YOURSELF FROM FRAUD
Mobile banking apps have built-in security measures that don't store your details on your phone. As long as you use them correctly, your information should be safe. The following tips will help you keep it safe, too.
- Always make sure you download the official app offered by your bank.
- If you sell your phone, or throw it away, restore it to its factory settings first.
- If your phone is lost or stolen always ring your bank as soon as possible.
And don't forget your consumer rights. Neil Aitken, a spokesperson for The UK Cards Association, says: "The abiding principle remains that as long as a customer doesn't act fraudulently or negligently, they won't be liable for fraud on their account."
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.