Which should you use?
You can use contactless to pay a business like a shop using your debit or credit card or your phone.
You can use Paym to send money to a person using your phone. The money is transferred from your bank account, and you can use it to receive payments too.
You can make a contactless payment using your debit or credit card by holding your card near to or on a card reader. It makes paying much quicker because you do not have to enter your PIN.
You can use contactless to pay for transactions of up to £30 that you would usually use your card for, including:
In restaurants or bars
To pay for buses, the tube or trains in London
However, not all businesses accept contactless payments yet. Look out for this symbol at the till or ask if contactless is accepted. If not, you can pay with your card by entering your PIN as normal.
Contactless cards have a small antenna inside them, which transmits the digital information a card reader needs to process a payment. Your card will then be debited in the same way it would for any other transaction. You have to enter your PIN the first time you use contactless.
Contactless transactions could still go through even if you have run out of money. Retailers do not have to check how much money is in your account before accepting your card payment, meaing you could be charged a fee if you do not have an authorised overdraft agreement in place.
Limits on contactless payments
The maximum you can pay per transaction with contactless is £30. Some banks and credit card providers also set a daily spending limit, often £100, but some set no daily limits.
Your card provider sets these limits, so you cannot change them. However, you can just pay using your PIN if you need to spend more than the limit allows.
Can you get contactless?
Contactless now comes with most debit and credit cards as standard, but some providers do not offer it yet. To check if your current card has contactless, check if it has a radio wave symbol on it.
How safe is contactless?
Contactless payments come with two main risks:
You accidentally pay with the wrong card by holding two of them near the card reader
If someone steals your card and spends on it
You can avoid paying on the wrong card by taking the one you want to use out of your wallet when you pay.
Card providers have several ways of stopping fraudulent transactions if your card is stolen, including:
Their limits on how much you can spend with contactless
Sometimes you have to enter your PIN for a contactless payment to go through
They can freeze your account if your card is stolen and you report it immediately
Contactless payments with your phone
You can make contactless payments without your credit or debit card by using your smartphone instead. This is available with:
Apple Pay if you have an iPhone
Android Pay if your phone uses Google's Android operating system
It works using near field communication (NFC), which is a feature that now comes with most smartphones. You use an app to add the details of a credit or debit card to your phone.
You can then use your phone in the same way as a contactless card. You just need to wake up your phone and hold it next to a card reader when you pay a business.
If the transaction is for more than £30, you may need to unlock your phone with a PIN, pattern, password or by scanning your fingerprint.
Here is how to set up and use Apple Pay. You can also check if it is available with your phone and your bank or credit card provider.
Here is how to set up and use Android Pay. You can also find out if it works with your phone, and if your bank or credit card provider have signed up to it.
Sending money with Paym
You can use Paym to:
Receive payments from someone else. The only information they need is your mobile number.
Send payments to another person in the UK if they are registered with Paym. You just need their mobile phone number to send money to them.
It works by letting you link your bank account to your mobile phone number. This means you do not need to share your bank details with the person sending you money.
You can link your phone number to your bank account by registering for Paym through your mobile banking app.
How to use Paym
Log into your mobile banking app
Choose to send a mobile payment
Select who to pay from your phone's contacts, or enter their mobile number
Enter the amount
The money should reach their account within two hours
Check you can get Paym
Several UK banks and building societies offer Paym. You can check if your bank offers it here.
You usually need a smartphone to use Paym because you use it through your bank's app, which must be installed onto your phone.
Limits on Paym
The maximum amount you can send through Paym each day is usually £250. However, banks can choose to offer you a higher limit.
You can only have one bank account linked to your mobile phone number. However, if you have a joint account with someone else, you can link both of your phone numbers to it.
How secure is Paym?
The risk of losing money from Paym could come from:
Losing your phone and someone else using it to send a payment
Making a payment yourself and sending it to the wrong person
However, if you lost your phone, nobody else could send a payment from it unless they also knew your login details for online banking. If you reported it as missing to your bank, they may be able to stop unauthorised transactions or even refund them.
You should be able to avoid sending money to the wrong person because you have to verify the recipient's name when you use Paym. If you accidentally sent money to the wrong person, your bank could help you get it back
Contact your bank to unregister from Paym. Your phone number will then no longer be linked to your bank account.
If you switch your account to a new bank, you can register your new account with your mobile number. First contact your old bank to unregister your mobile number from the account you held with them. You can then register for Paym with your new bank.