RBS unveils text-to-pay app

The new system will only allow £100 to be transferred each day

RBS has unveiled a new banking app which will allow customers to transfer money to contacts on their smartphone.

The bank said it was confident that the app was secure, after one of its previous applications was used by fraudsters to steal money.

The new app will allow users to send a payment of up to £100 to anyone with a Visa card, by entering their mobile phone number.

It is being gradually introduced, with a full launch planned after Easter.

RBS and NatWest, part of the same banking group, said the app could be used to pay tradesmen.

A plan to introduce an industry-wide mobile payments system is being drawn up by the UK Payments Council, and should be available from spring next year.

Security

The system will work in a similar way to sending a text message, with funds transferred at a similar speed to online banking.

Recipients who are RBS or NatWest customers, and who have a Visa card, will see transfers put into their account automatically.

Customers of other banks will be sent a text message and have to accept the payment by entering their details.

A limit of £100 a day has been set, and if payments are repeated for several days in a row, they will eventually be blocked.

A spokeswoman for the bank said lessons had been learnt from a security breach last year.

Radio 4's Money Box programme heard from dozens of customers who told of how they had been defrauded by thieves using NatWest's Get Cash mobile phone application.

This app allowed people to contact the bank to get a code, which then allowed them to withdraw cash from an ATM without a card.

NatWest suspended the app while it beefed up security and promised to refund customers' losses.

The bank's rival Barclays has already launched its Pingit app, which also allows adults with any UK current account to transfer small amounts of cash.