In the UK last week Barclays revealed it was planning to extend its mobile phone number-based P2P payments service, Pingit, to retailers. Launching soon, the Buyit feature will let users make purchases by scanning QR codes on adverts.
Zapp from Vocalink in UK
VocaLink, the UK's ACH which also runs the real-time Faster Payments service, has formed a new company, called Zapp, to build a service that will let Brits link their bank accounts to their mobile phone numbers and make real-time payments through their handsets.
VocaLink is currently working to get banks and retailers on board by the end of the year so it can launch Zapp to consumers in early 2014, when it will target all commerce channels, mobile, online and in-store payments.
Banks which agree to take part in the service will integrate Zapp into their mobile apps and then invite customers to opt in, linking their bank account to their phone number.
Then, at participating retailers, users shopping on their phone or tablet who click the pay by Zapp button will be taken to their mobile banking app, where they will be shown their account balance before being asked to confirm the transaction.
On a desktop or in-store, the payment terminal or browser will generate a six-digit Zapp code which the user enters into their mobile app to complete the transaction.
The Zapp payments will be cleared through the Faster Payments service. By sidestepping cards, VocaLink argues that Zapp will help Brits unlock the money in their current account in a much simpler and more secure way because no information is passed to the recipient. Meanwhile, retailers will benefit from instant payments and fewer abandoned shopping carts, and lower transaction fees.
iDeal and MyBank
The new Online Banking ePayment (OBeP) systems allow consumers to make purchases using their most trusted financial institutions - their banks. With this approach, consumers don't have to share their personal information with merchants and can pay for goods directly from their bank accounts. Usage of ObeP services is growing, established domestic services, such as Netherland's iDeal service, are becoming more popular and service suppliers are now providing their services in many countries.
The EBA have carried out a Technical Pilot - of their ObeP service multi-country service - MyBank. Their solution was launched in March 2013 with 28 banks participating. A mobile application and functionality supporting the creation or modification of e-mandates for SEPA Direct Debits are planned to follow later in 2013.
All of these systems do not use payment cards. They use the bank account holder's local ACH for clearing and settlement. The card schemes need to be careful in their IC negotiations with retailers and the authorities otherwise they could accelerate the move to OBeP systems.
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