Major UK banks announce integration with Zapp as m-payments take a leap forward
HSBC, first direct, Nationwide, Santander and Metro Bank are to be the launch banks for Zapp mobile payments in the UK, opening up simple and secure mobile payments to some 18 million UK consumers in September 2014 when the service goes live.
Built into existing mobile banking apps, Zapp – which is sponsoring the Mobile Theatre
at Internet Retailing Expo on 26-27 March at the Birmingham NEC – aims to make mobile payments for both online purchases and ultimately in-store ones too that come directly from users’ bank accounts.
In an crowded mobile payments space, Zapp stands out as it is integrating at the bank app level – as well as offering Faster Payments, so that merchants don’t suffer cashflow issues – so that consumers actually get a simple way to pay with their mobile phone and bank account, rather than having to rely on numerous wallets for and long passwords.
Already, the likes of O2-Telefonica have scrapped their O2 Wallet product due to poor uptake – in part due to being very complex to use. It has long be recognized that mobile payments will only work if it makes paying for things easier than it is by other means. Zapp appears to offer this and these five major banks agree.
Steve Pateman, Executive Director, Head of UK Banking, Santander puts it like this: “Listening to, and responding to customers and their needs is at the heart of what we do at Santander. Our customers want the choice to be able to pay on the go using mobile technology, and the Zapp proposition is second to none with its capabilities. Santander is as delighted to be involved with this initiative as we think our customers will be, when they start using it. Zapp helps us meet the growing demand from our customers to use their mobiles to pay for goods and services swiftly and securely. With the vast majority of UK merchants on board, we expect to see rapid take up of payments powered by Zapp.”
Brendan Cook, Head of Retail Banking & Wealth Management at HSBC, adds: “Our customers' use of mobile banking is growing rapidly. Introducing Zapp to our mobile banking services will mean customers can benefit from convenient, fast and secure ways to pay using their mobile devices.”
Tony Prestedge, Chief Operating Officer of Nationwide Building Society believes that “Zapp supports our continuing drive to help put customers in control of their finances. Using Zapp, consumers can use their trusted banking app to directly pay for goods and services, and instantly check their balance as part of their process.”
Paul Marriott-Clarke, Commercial Director of Metro Bank concludes: “We’re excited to partner with Zapp on this launch. Metro Bank is committed to offering customers the best in service and convenience, through whatever channel they choose to use for their banking. Zapp is an exciting innovation that will provide something extra to those who want to bank through mobile devices, and we’re delighted to be involved.”
Analysts are also reasonably positive about Zapp and what it means for mobile payments, many thinking that the strategy of integration with banks is the way forward and not rushing to market has been key to getting it right.
“Zapp has taken its time and put in place a solid foundation for its mobile payment service ahead of the launch, instead of rushing to market with a half-baked offering,” says Eden Zoller, principle analyst at Ovum. “Integrating Zapp with existing financial services is a good move as these are the brands that consumers trust the most to deliver m-payments, as shown by Ovum’s Consumer Insights survey where 32% of UK respondents chose banks as their most trusted m-payment service provider.”
Zoller believes that the Zapp application looks like it is trying to keep things simple and convenient for consumers – and it does not require consumers to directly reveal account information to third parties, which might ease the concerns consumers have with security of mobile payments. In Ovum’s Consumer Insights survey, 52 % of UK respondents did not think m-payments were secure.
Zoller continues: “The ability to provide scale is a critical success factor for mobile payments and Zapp has made a promising start by signing the financial brands announced. However, to succeed in its ultimate goal of becoming a single, industry wide m-payment platform, Zapp will need to get the other major UK financial institutions behind it, such as Barclays that has its own Pingit application that is proving popular in its own right. Alongside this with more countries and regions developing faster payments like infrastructure, if Zapp proves successful in the long term, it could prove to be a model for other markets. Visa and MasterCard will likely be watching developments closely.”