Texting payment services like this one are still rare, so it's unclear what kind of impact such innovations will have, says Marc DeCastro, research director of consumer banking at International Data Corp. "There are already enough alternatives in place today," he says. "It's a technology looking for a need. We might be ready for it eventually."
Banks have been using text messaging for banking functions for a few years now, though not for person-to-person money transfers. Wells Fargo, for example, allows customers to check account balances through text messages.
Terry says Barclays didn't just want to follow what other banks were doing. "We wanted to be at the front instead of joining someone else's queue," he explains. "It put us out there because we weren't racing against anyone else."
After putting out the first version of Pingit, Barclays noticed to its surprise that people younger than 18 were requesting the service via blogs, social media and app review websites. "We did a concerted effort and brought the age limit to 16 since so many younger people wanted to use the service," Terry says. Two weeks later, the mobile team rolled out another version so teens 16 and older could sign up.
IDC's DeCastro points out that not everyone has his or her own bank account but can still use prepaid debit cards that are linked to a bank account. "There are lots of practical applications for it if you don't have a checking account," he noted. "There's definitely a market for that."
Yet the analyst cautions that until there is standardization among banks and service providers, there likely won't be widespread adoption of the technology. "There are so many vehicles to move money around. With the lack of a standard accepted format in the industry, it creates all these starts and stops."
In the meantime, Barclays continues to add features to the app such as payments via QR codes in order to keep the service up to date. Every month, the bank releases a new version to the app stores for Apple, RIM and Android and they are working on further simplifying the registration process and social media integrations.
Read more about mobile/wireless in CIO's Mobile/Wireless Drilldown.