Lloyds TSB has added extra mobile functionality to its internet banking service.

Currently, the bank offers simple mobile features such as requesting balance updates and alerts for when a card is used overseas via SMS. With the new service, available from mid-October, customers will be able to use extra features such as the ability to move money between Lloyds TSB accounts.

The new mobile banking pack also offers high and low account balance text alerts, overdraft warnings, mini statements and a top-up facility for pre-paid mobile phones. But the bank does not intend to offer the possibility of setting up direct debits or making one-off payments via mobiles.

The service, which took four years to develop, was developed in partnership with supplier Monilink and sits on the banking network of UK payments processor Vocalink.

As well as PIN blocking mechanisms and encryption, security for the system undergoes penetration testing on a weekly basis and the processes are checked by experts every quarter.

Premier account holders will receive the mobile service free of charge, while other customers will receive the messages for free until the end of the year and will then need to pay £2.50 a month. Student account holders will be exempt from payment for the service until October 2009.

According to independent research carried out by the bank with 2000 adult mobile users, 60 per cent would like a facility to keep tabs on their money, while 52 per cent would like to be able to move funds between accounts and 36 per cent believe that mobile banking would help them manage their finances more efficiently.

The bank's main target for the new service is existing customers for whom mobile banking is already part of their lifestyle, said Ashley Machin, internet director at Lloyds TSB.

"We are being extremely careful not to pigeonhole customer segments. For that reason, we are focused on ensuring that users go through a pragmatic, intuitive mobile banking experience and making it really easy and simple to use, " said Machin.

Other high street banks such as Barclays, Abbey and Alliance & Leicester are also offering paid SMS services. But other institutions, such as Royal Bank of Scotland, offer text message alerts for free and have no plans to start charging users in the near future.

UK mobile users rank among the most reluctant to use their device to bank online, with 79 per cent of users saying they do not trust phones to provide a secure transaction, according to recent research from Unisys.