How to send money with a smartphone by text

Many banks and building societies now include mobile payment options as a standard feature of their banking apps, and more of us are taking advantage of the convenience.

Mobile payments allow you to move money between you and your contacts, other mobile numbers and even retailers with the help of your smartphone. Unlike standard bank transfers, you might not even need the payee’s bank account details for delivery.

Mobile banking

Mobile banking, which helps you manage your accounts using only your smartphone and an Internet connection, is more widespread. The majority of today’s banks and credit unions offer mobile banking apps linked to your bank account.

Depending on your bank, you sign in to the app to manage your account and:

• Transfer money among your accounts
• Transfer money to other banks
• Pay bills or schedule payments
• Check your account balance
• Upload and deposit checks
• Create and use mobile wallets
• Find nearby branches and helpful contacts
• Manage investments

Text mobile payments

Today, you can easily send money to bank accounts by only using your smartphone.

Also known as SMS mobile payments, all they require is your recipient’s phone number. Depending on your bank’s payment system, funds are either transferred from your bank account or charged to your mobile phone bill.

Peer-to-peer SMS mobile payments

For a successful mobile money transfer, both ends of the transfer must sign up for mobile payments by:

• Direct text. You’re given a code and number to text to opt in.
• Phone number. You receive a text message from your bank or transfer specialist, responding as directed to set up the service.

After sign-up, your financial institution will provide instructions on how to transfer money by phone. After completing your payment request, your recipient receives a text explaining how to claim your money.

Making purchases with SMS mobile payments

Some retailers and other services also allow customers to make purchases by text. In most cases, they will text a payment request to your phone – usually in the form of a link or code, which acts as mobile checkout, allowing you to pay for goods or services on the spot.

Mobile wallets

Mobile wallets are another way to use your smartphone for purchases and transfers. Offered by banks and third parties, all you need is your credit or debit card number and a mobile device to get started.

In most cases, you just download a wallet app, enter your credit or debit card information and set up a PIN, fingerprint or face ID for security. From there, your wallet takes care of transactions without you having to dig for your card.

Contactless mobile payments

Most smartphones are equipped with NFC – near-field communication technology. It’s a tech-heavy way of referring to contactless payments, where you pay for purchases by waving or tapping your device on a contactless terminal.

Access to mobile wallets is continuing to grow, with most of the big-name high-street shops and supermarkets on board for tap-and-go payments.

Read our guide to the pros and cons of contactless payments.

Google Pay

Google Pay is a mobile wallet that offers a multiple payment methods supported by most major UK banks. You simply sign up for a Google account, add your credit or debit card as a payment and send or receive money in minutes.

Google Pay allows users to transfer money and pay for purchases by:

• Text to mobile numbers
• Contactless payments
• Gmail
• iMessage, Android Messages and other messaging systems
• Amazon, iTunes and other apps
• Online checkout
• Android messages

Apple Pay

If you’ve got an iPhone, Apple Pay helps you get paid and send cash to phones through similar payment methods. You set up and verify your debit, credit or Apple Pay Cash card in the built-in mobile wallet app to transfer money and buy through:

• iMessage
• Siri
• Apple Watch
• Contactless payments
• iTunes and other apps
• Mobile web stores

Mobile payment services

If you aren’t quite ready for mobile payments and mobile wallets, other third-party payment services make it easy to store your sensitive payment details for future mobile transactions.

These services often require only a phone number or email and bank account for on-the-go transfers and payments.

Banking apps you can send use to send money to friends and family

Monzo Current Account

9.3 Excellent

Minimum opening balance	£0
Account fees	£0
Interest (AER)	0% AER

Go to site Read review

Monzo’s Nearby Friends feature enables you to send money to anyone who also banks with Monzo, as long as they are nearby. All you need to do is switch on Bluetooth on your phone and then tap the payments section in your app. You can also use this feature for splitting bills. If your friend isn’t nearby, simply search for your friend’s name through the ‘Pay With Friends’ feature to make your payment. Alternatively, you can make payments to anyone with a UK bank account by email, text or social media without their bank details, as long as they are a contact in your phone.

Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39% EAR variable.

• Pros and cons

  Pros

  • Easy to set up
  • Good for budgeting and categorising spending
  • Automatic saving feature
  • Fee-free spending abroad
  • Slick app with face login
  • Overdrafts and loans available

  Cons

  • Free ATM withdrawals outside the EEA limited to £200,
  • £1 fee for depositing cash at PayPoints,
  • Maximum cash deposit of £1,000 every 6 months
  • No rewards program

• More details

  Minimum opening balance	£0
  Switch service guarantee	Yes
  Account fees	£0
  Overseas card transactions	0%

Minimum opening balance	£0
Account fees	£0
Interest (AER)	0% AER

Go to site Read review

Revolut Standard

8.9 Great

Minimum opening balance	£0
Account fees	£0
Interest (AER)	0% AER

Go to site Read review

Whichever plan you have with Revolut, you’ll be able to send money to other Revolut users in the mobile app completely free of charge. All you’ll need is the recipient’s phone number, email, Revtag or QR code and they should receive their payment within 20 seconds. Should you wish to send money to someone without a Revolut account, you can create a payment link in the app, stating how much money you want to transfer. Once sent, the recipient has 7 days to accept your payment. You can also use this feature to request payments from others.

• Pros and cons

  Pros

  • Low overseas fees
  • Quick sign-up
  • Earn cashback on spending
  • Set budgets for financial goals
  • Virtual cards for online purchases
  • Easy to transfer money internationally

  Cons

  • 1% currency conversion charge on weekend spending abroad
  • Free cash withdrawals in the UK and abroad both limited to £200 per month
  • Cannot deposit cash or cheques into the account
  • Charged a fee to receive your bank card

• More details

  Minimum opening balance	£0
  Switch service guarantee	No
  Account fees	£0
  Overseas card transactions	0%

Minimum opening balance	£0
Account fees	£0
Interest (AER)	0% AER

Go to site Read review

Starling Current Account

9.8 Excellent

Account fees	£0
Interest (AER)	0% AER

Go to site Read review

If you and your friend or family member both bank with Starling, it’s easy to send money via the bank’s Nearby Payments feature. Simply open the app on your phone and locate the other person over Bluetooth or wifi. Alternatively, you can use Starling’s Settle Up feature to receive or transfer money in seconds - all you need is a payment link. If the other person doesn’t bank with Starling, payments can be made with their card, Apple Pay or Google Pay. You can send and receive up to £250 a day with Settle Up.

Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 15% EAR variable.

• Pros and cons

  Pros

  • Split any bill with a tap
  • 24/7 customer support
  • Bill manager & instant alerts
  • Spaces to help manage your money
  • No charge from Starling for card use abroad

  Cons

  • No branch network
  • No interest on your current account balance
  • Limited product range compared to other banks

• More details

  Switch service guarantee	Yes
  Account fees	£0
  Overseas card transactions	0%

Account fees	£0
Interest (AER)	0% AER

Go to site Read review

PayPal

The popular PayPal lets you send and receive mobile payments directly to phone numbers and email addresses. You sign up for a free account, linking your credit or debit card to send money. Your recipient doesn’t need a PayPal account for you to initiate the transfer.

Use PayPal to send payments with your smartphone in three ways:

• Through the PayPal mobile app
• By text message
• Through a mobile web browser

After you confirm your payment, your recipient receives an email or text allowing them to create an account and claim the money. Because funds are stored in your PayPal balance, you don’t even need a bank account.

Use your balance to send money to loved ones, withdraw money to your linked bank account or pay for goods and services at millions of retailers who accept PayPal at checkout.

Security of mobile payments

With hacking and data breaches in the headlines, you might be concerned about the safety and security of mobile banking and payments. But digital payments are more secure than you might think, employing tools like:

• Fingerprint or face scanners. Many mobile wallets and contactless payments require you to scan your fingerprint or face before a purchase, sometimes as a secondary ID. This technology helps secure your sensitive credit or debit card and also protects against card skimming.
• Secure passwords. You’ll want to set up a password that’s difficult to guess. Some payment services also use one-time passwords, PINs or codes for transfers to prevent anyone else from claiming your cash. These passwords expire after the transaction is complete or an allotted time.
• Monitored payments. Depending on the service, you may be able to monitor or cancel your mobile payment if you discover you’ve sent it to the wrong address or it’s not picked up as expected. Cancelling a payment returns the funds to your account.
• Encrypted data. The majority of mobile banking and payment services encrypt the personal and financial information you link – meaning that the service, merchant or any other party itself isn’t able to access your banking information.

What to watch out for

When it comes to offline safety, most people know not to share their PIN or card information. Similarly, here’s what to keep in mind when sending money through your smartphone.

• Protect your device against theft. Mobile wallets are secure, often requiring your fingerprint, facial recognition or your PIN. But what about if you lose your phone? Most devices and payment systems today allow you to remotely put your device into lost mode. This prevents potential thieves from using your card even if they make it past your PIN or fingerprint. And because your data is encrypted, they can’t access your information to use your card manually.
• Take caution with public Wi-Fi. While unlikely, it’s possible for hackers to intercept information sent on unsecured public Wi-Fi networks. Although payments are encrypted, hackers can “spoof” your mobile wallet when you enter your information, giving them access to your accounts. Avoid this by setting up your mobile wallet at home, where your network is secure.
• Watch for phishing scams. Many fraudulent messages or links appear to come from seemingly legitimate sources. The best way to protect yourself from these scams is to avoid clicking links and ads or visiting websites from unfamiliar sources.
• Monitor for malware. The threat of malware is more common on computers, but that doesn’t mean your mobile phone is completely safe. Malware is like a virus that infects your phone to steal your information, passwords and other data. Just like phishing scams, you can reduce the risk of malware by avoiding links and ads from sketchy or unfamiliar sources.

Bottom line

Your smartphone is for much more than chatting with loved ones. But you’ll want to find a mobile payment service that best fits your lifestyle, accounts and shopping habits, so do your homework first. Learn more about flexible payment services and making the most of your money in our comprehensive guide to bank accounts.

Real questions from readers

• How do I monitor the status of a mobile payment?

  Each provider will offer different ways of monitoring the progress of your payment, but you’ll usually be able to view the status through an app or your online account.

• What happens if I enter the wrong mobile number?

  With many services, your transaction is “pending” until the payment is claimed, meaning you can cancel it before it’s picked up. If the payment shows as received, call your bank or provider to ask how to reverse the transaction.

• Someone sent me a mobile payment. How do I collect the money?

  With most mobile payments, you’ll receive a text or email with details on how to complete the transaction. The process of setting up an account or claiming money varies depending on the service used, so if you’re unsure, contact the bank or service that’s sent you the notification.

• How long do I have to collect a payment?

  It depends on the payment service and financial institution, but you generally have a week to a month to pick up the payment before it expires. With PayPal, funds are returned to the sender after 30 days if the recipient doesn’t claim the money before then.

• What are the transaction limits of mobile payments?

  Each provider enforces their own transaction limits, so check first to find out how much you can send or receive.

• Do I need an account with a bank to collect a payment?

  No. Depending on the financial institution or service, your phone number, reference number and account details should be enough to forward payment to your account.

Written by

Ryan Brinks

Editor

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Ryan Brinks is a former editor and publisher at Finder, specializing in investments. He holds a journalism degree from University of Wisconsin–River Falls. See full bio