Lydia, a French mobile payment company, has announced it will stop using phone numbers as a method for making payments. This feature was a key part of the company’s early success, allowing users to send money to each other quickly by simply using their phone numbers instead of more complicated details like account numbers or IBANs. Lydia says the change is due to the evolving landscape of mobile payments, where phone numbers are now seen as personal data that need stronger protection. This decision is partly driven by the rise in scams and the need for better security measures. In the coming months, Lydia plans to replace phone numbers with other identification methods, such as QR codes or payment links. The move comes as Lydia faces growing competition in the mobile payment sector. Traditional banks and new digital banks are entering the market with similar services. For example, the European Payments Initiative (EPI) has launched a product called Wero, which is available through banking apps and backed by strong advertising campaigns. This poses a challenge to Lydia’s position in the market. Additionally, online banks like BoursoBank and Revolut have gained popularity in France, further increasing the competition Lydia must navigate. Lydia was founded in 2011 and reached the milestone of becoming a "unicorn" company in 2021, meaning its valuation surpassed one billion dollars. Its original service was praised for its simplicity, allowing users to send money to friends and family using just their phone numbers. This made it more user-friendly than traditional banking methods. However, the company now says that protecting user privacy is a key reason for changing its approach. This shift could also be a strategic move to distinguish itself from Wero, its main European competitor. The change in Lydia’s payment system reflects a broader trend in the financial industry, where security and data protection are becoming more important. As mobile payments become more common, companies are rethinking how they handle sensitive information like phone numbers. Lydia’s decision may signal a new phase in how digital payment platforms operate, balancing convenience with the need to safeguard user data.