HSBC launches banking by mobile phone service

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HSBC is launching a service today that enables its customers to perform banking functions over a mobile phone.

The UK's largest bank is the latest company to try its hand at establishing a mobile payments service, but hopes a pragmatic approach to "m-commerce" will prove more successful than previous attempts to crack the market.

Customers of HSBC, and its subsidiary first direct, will be able to check bank balances, view statements and to top-up mobile phone accounts using the service.

Jonathan Etheridge, the head of e-channels at HSBC, said although the handset could be used for a variety of functions, the bank has decided to take a "pragmatic" view as to what people will want to use the it for. He said services such as account transfers, Oyster card top-ups and congestion charge payments are the sort of functions the bank may look to add if customers want them.

Mr Etheridge said previous attempts to launch mass-market mobile payments systems in the UK, such as Simpay and Mondex, failed because they did nottake into account how a customer would want to use mobile payment systems.

HSBC is working with MoniLink, a joint venture between the IT services company Morse and the ATM company The Link, to offer the service. Morse's Alastair Lukies said the service is secure as all the data is stored on servers, not on the phone, and only a registered handset that is linked to the account can be used to access the information.

"There are 50,000 ATMs in the UK. We could have 50 million," Mr Lukies said, adding that there are 150 million balance enquiries made a month in this country. He added that other UK banks are expected to start offering similar mobile banking services over the coming months.

HSBC's first direct started offering basic mobile banking services in 1999 by sending its customers text-message alerts related to their accounts. The service proved popular, with 30 per cent of its customers opting to receive weekly statements via text. Customers will pay 20p per balance enquiry and 25p for a mini-statement.

Despite the strong take-up of internet banking, most consumers have proved hesitant to use their phones to buy anything more than a ring-tone for the phone or a short video clip in Europe. This is despite the rapid take-up of m-commerce in countries such as Japan and Korea.

Companies such as NTT DoCoMo have harnessed the ubiquity of the mobile phone for an increasing number of transactions.