Feeds

Five UK banks sign up to hook up customers' ACCOUNTS to their MOBILE DEVICES

Zapp! Yes, that's the sound of your cash disappearing

Bridging the IT gap between rising business demands and ageing tools

+Comment British banks HSBC, First Direct, Nationwide, Santander and Metro Bank have all signed up to Zapp's mobile payment system, allowing their customers to pay using a tablet or smartphone.

The announcement comes just days after O2 snapped shut its Wallet service.

The five banking firms together provide services to around 18 million British account-holders - that's around 34 per cent of them.

Zapp is not a wallet. You don't have to pay money into the Zapp system. It's essentially an application which links your account with one of the aforementioned banks. Vocalink, Zapp's parent company, runs the UK national payments system, which explains how Zapp was able to sign up notoriously hard-to-pin-down banks.

The Zapp system will be rolled out through the banks' own apps. You won't have a Zapp app. So while HSBC owns Marks & Spencer Financial Services plc there isn't currently a Marks & Sparks phone banking app and Marks & Spencers customers are not immediately included in the project. What you will have is a pay-by-Zapp option, akin to PayPal, when you buy stuff.

The reliance on banks to produce the apps means that which phone platforms will be supported is again down to the individual banks. That means iOS and Android pretty much ubiquitously and an expectation that Windows Phone will start to appear as interest in BlackBerry wanes.

The service is designed to be used both online and in real shops. If you buy something with your mobile phone it will fire up Zapp from inside the payment process to make the transfer. If you are working on a PC, when you get to the checkout it will launch the app on your phone to verify payment - eliminating using the much disliked 3D secure system most web checkouts rely upon. If you're in a shop, you can pay using NFC, by scanning a QR code at the retailer or entering a PIN given by the retailer to confirm the transition. At home you can pay paper bills by scanning a QR code on the bill.

From the retailer's perspective the costs are more in line with a debit card than traditional mobile phone payments through operator billing or credit cards. This means there is a per-transaction cost - typically a retailer pays 20p per card - rather than a percentage cost. Zapp appreciates that this is prohibitive for low value transactions like buying a can of Coke or a music download and expects to have a separate micropayment tariff.

Comment

While the technology behind Zapp seems sound, the challenge as always will be in getting people to use it. The two things banks really hate are customers and cash.

The thought of someone walking into a branch to cash a cheque is most banks' worst nightmare. But then the feeling is mutual. Getting customers to do all the work on their mobile phones is obviously very much in the banks' favour. The problem is consumers like cash. Just think how much more special a £50 note feels than three £20 notes.

Zapp leaves this challenge to the banks. They won't get any help from the mobile industry. There is no revenue share so operators won't want to pre-install on the phones they sell and handset manufacturers won't install it if the operators don't want it.

Customers will want to see a real benefit, and remember it took credit cards the best part of 50 years to go from launch to mass market, and chip and pin took a good 10 years to get established. Meanwhile mobile payment solutions come and go daily... expect another one tomorrow. ®

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.