Banks representing 18 million UK customers have adopted a new mobile payment service that could replace the wallet.
HSBC, First Direct, Nationwide, Santander and Metro Bank have signed up to the Zapp mobile payment scheme provided by VocaLink, the company behind Link cash machines, which allows customers to pay for goods and services in real-time using their existing bank accounts and a smartphone or tablet.
The service, which is due to launch in the autumn, will be integrated into the banks’ existing mobile apps and those using it will be able to see their account balance before they pay, as well as being able to choose which account they want to pay from.
“I am truly excited to announce our lead financial institution partners,” said Peter Keenan, chief executive of Zapp. “Together with our already announced acquirer partnerships, Zapp will go to market with real scale offering simpler, more secure and efficient payments to millions of customers and businesses.
“I am delighted that these financial institutions and acquirers have chosen to innovate to deliver value to their customers, lead the market and deliver huge benefit to the UK economy.”
When customers get to the checkout of a shop that accepts Zapp payments, they will have a six-digit code sent to their mobile device. When they pay, the money will move instantly in "real-time" to the merchant.
Alternatively, customers will be able to scan a code into the handset to make a payment. This method can be used to pay bills sent through the post.
Brendan Cook, head of Retail Banking and Wealth Management at HSBC, said: “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.”
Payments made via the service work through secure digital ‘tokens’, which mean customers don’t need to reveal any of their financial details to merchants when they are shopping, and all Zapp payments will be covered by similar protections to those already existing for debit card payments.
Zapp said that those institutions now on board with the project represent more than one-third of all UK bank accounts and 60 per cent of UK merchants will be able to receive payments in this way.
Steve Pateman, executive director and head of UK Banking at Santander, said: “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.”