Egg announced on Monday that it will launch "Egg Pay" this week, a new service that will let the Web-bank digitally transfer money via e-mail to any of the UK's 110 million bank accounts. Egg says that through the service, Egg customers can send up to STG200 to anyone with an e-mail address and a UK bank account.
To make a payment the sender first needs to register for an Egg Pay account. Following that, the two parties who wish to make a transaction agree on a secret password. The sender then e-mails the recipient how much money is to be transferred and what bank account payment will come from. The recipient receives the e-mail, which contains a unique Web site address. On that Web site the recipient enters the previously agreed password and what bank account to credit.
The funds are then transferred from the customer's debit card or Egg account and credited to the recipient's account in three to four working days.
Users who register for an "Egg Pay" account will also pay a rate of two percent gross per year interest on all deposits and payments awaiting collection.
Egg says it has not done preliminary research on the product's potential and is therefore offering no projections on the take-up of the service. But the company did commission a poll from Mori which claims that 33 percent of British adults, or around some 14 million UK residents, say that they are interested in digital payment services. That survey also claims that some 20 million British adults now use e-mail, and that there has been a 34 percent decline in the use of traditional cheques since 1990.
"British people's love of the cheque book has failed in recent years and usage is set to decrease even further, with APACS (Association for Payment Clearing Services) predicting a 41 percent decline by 2009," claimed Patrick Muir, director of marketing with Egg UK. "Consumers seem to be finding more convenient methods of payment, which fit into their busy lifestyles."
In the US, services similar to the one launched by Egg are somewhat more commonplace as Web-based banking in general enjoys higher penetration levels. In Europe e-mail based P2P payment services are more rare, even though firms like Nochex have been offering such applications for some time. Egg is in fact among the first UK banks to launch this type of consumer payment application although it is thought that other banks will soon launch similar services.
The news from Egg follows reports in February that Egg and Microsoft had entered into an alliance to enable 10 million customers of Microsoft's Hotmail service to securely e-mail money. A spokesperson for the company told ElectricNews.Net that deal is still set to go forward and in the next month the company plans to launch a product for Hotmail's 10 million UK customers similar to Egg Pay.
The spokesperson also said that Egg currently has no plans to extend the service to its customers in France following its acquisition of Zebank earlier in the year.