You will soon be able to make money transfers with a mobile phone, email address or Facebook account with a new bank account from Realex. Here's how it works.
A new type of bank account is set for launch which will allow customers to make use of their mobile phone and Facebook to make and receive payments.
Transactions are completely free and you can make payments with a just a phone number, instead of entering a current account number.
The scheme, known as Realex Fire, works in a similar way to the social network, allowing users to create circles of friends if they need to make multiple transfers.
How Realex Fire works
The account is operated online and you can transfer in money from any UK bank or building society. You can then add different accounts and manage them all from one place.
Once money has been added to the Realex Fire account, it’s possible to make payments to other people as and when you need to.
A circle of friends will then be created, which will include the people you need to make payments to. By inviting them into the circle you can make instant payments into their bank accounts or request payments.
Realex tells me the people being paid don’t need to be members, setting it aside from similar apps provided by the high street banks such as Barclays PingIt.
The account can be linked to Facebook. Direct messages will be sent through the social network when payments are made, or need to be paid. If it’s not linked, messages can be sent by text message or email.
What’s the catch?
The major drawback at the moment is that Realex Fire is only available to people living in Ireland. It has only just been launched, with the aim to make it open to people living in the UK by the end of the year.
It’s licensed under the Payment Services Directive and regulated by the Central Bank of Ireland. As the company is a payment institution and not a bank, it’s not allowed to lend money and instead holds it, on behalf of customers. This money is kept segregated; therefore it has a certain level of protection, should the company go bust.
Facebook payments
The thought of connecting Facebook with an account which makes money transfers could sound risky to some. There are frequent stories hitting the headlines about how social media platforms are used commit fraud and Realex Fire looks on the surface like a prime opportunity for this.
However, the company says it doesn’t share any sensitive information through Facebook. In fact the only way it uses it is to tell people if a payment has been paid or is requested.
In this way it’s using the social network as another way to make the process smoother for the customer by notifying them through Facebook, rather than in a separate platform, such as by logging onto the site.
Is it any good?
As the company is still in the very initial stages of launching, it’s impossible to know how well it works, or how popular it will be.
This real test will come once it's rolled out across the UK.
As it allows payments to any UK banks and building societies, it appears to be a quick, hassle-free way of moving money around for free. Most major banks have their own money apps, but these typically only work between accounts with the same provider.
By using a social media model, it will be attractive to those who want to minimise the time they spend transferring money. The idea of creating groups is unique and will be helpful for those making regular payments to the same people.
It won’t be a model which appeals to everyone, but for those looking for an easy way to make payments, it’s an interesting prospect.
Alternative ways to transfer money
If you bank with any of the high street providers you should already be able to access your money through your mobile. Barclays, FirstDirect, HSBC, Lloyds, RBS-NatWest and Santander all offer this service which allows instant access to your accounts and a way to transfer money to other people.
Many providers also offer extra apps, such as Barclays Pingit, which allow Barclays customers to transfer money with a mobile phone number. You can find out more in our article How your mobile phone can help you manage your money.