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Published 17 February 2021
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Mobile Payment Apps: Everything you Need to Know

Mobile payment apps turn your smartphone into a wallet. Learn how to find a safe, secure app so you can start transferring funds and making contactless purchases.

Mobile payment apps allow you to pay for things and send and receive money without having to enter your card details. They’re quick and easy to use, and can be linked to your bank account or funded directly.

There are a variety of mobile payment apps available. Here we’ll explain everything you need to know to get started.

What are mobile payment apps? How do they work?

Instead of using cash or a card, mobile payment apps let you make purchases and send and receive money using your smartphone. Paying this way also means you avoid exchanging cash or touching any buttons, making it a popular option during the coronavirus pandemic.

With many mobile payment apps, you use your debit card to pay money into an online account. When you use the app to buy something or send money, the funds are deducted from that account. Likewise, if you receive money, it tops up your account balance.

Other mobile payment apps are linked to your current account. When you use the app, money is taken straight from the account you’ve chosen.

» MORE: Learn about contactless payments

How do you start using a mobile payment app?

You can start using a mobile payment app not long after you’ve downloaded it onto your phone or tablet. You’ll usually need to link your bank account or set up a new account with your chosen provider before you can make or receive payments.

Once you’ve done that, you can start making purchases or sending and receiving money through the app.

Are mobile payment apps safe?

Traditional banks are protected under the Financial Services Compensation Scheme (FSCS), which means up to £85,000 of your money is safe if a bank or building society were to go bust.

However, with mobile payment apps this same protection does not always exist. Instead, they may use what’s called an ‘electronic money licence’. This means your money is held in a different account, so if the company were to go bust your money is safe because it’s in a separate account. However, if the bank where the money is being held were to fail, there is a chance you would not get the money back.

Advantages and disadvantages of mobile payment apps

Mobile payment apps are a quick way of sending or receiving money, as you don’t need to use cash or a card or collect someone else’s bank details.

There are some security benefits, too. In order for someone else to use your account, they’d likely need to be in possession of your phone and know its passcode, plus sometimes be able to pass another layer of security such as a fingerprint or face scan.

Again, though, any money held within a mobile payment app may not be as secure as money in a traditional bank account.

How much do mobile payment apps cost to use?

You shouldn’t have to pay anything extra for using a mobile payment app. If there are charges, they need to be clearly shown beforehand.

However, if you opt to link your mobile payment app to a credit card, instead of to a debit card or current account, you’ll see a fee of roughly 3% from your credit card provider.

When someone sends me money, how can I access the cash?

Money sent through a mobile payment app will either go directly into the bank account you’ve linked to it or into the payment app’s account (which you can then transfer to your bank account). Most payments are instant, so the money should be in your account within a few hours, if not sooner.

How to choose a mobile payment app

There are lots of different mobile payment apps to consider. Here are some of the most common.


Several banks and building societies use Paym, which lets you send and receive money by using the mobile phone number of your contacts, rather than their account number and sort code. To use this free service, you’ll need to be registered and download the app onto your phone.


One of the most common mobile payment apps, PayPal is free to use and lets you pay without having to enter any financial details. It’s available at checkout on many shopping websites. You can also send and receive money through it with just the person’s email address or mobile number.

Apple Pay

If you’re an iPhone user, you can input your card details onto your phone one time and then select this as an option when buying things or sending money. You can use Apple Pay with an iPhone or Apple Watch, and it can also be used to make contactless payments at a number of retailers as well as transport systems such as the London Underground.

Google Pay

For Android users, Google Pay works in a similar way to Apple Pay for the iPhone. It’s preloaded on many Android devices and is widely accepted both online and in shops.

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