July 1, 2014
The rules of the game are changing with changing customer behavior. How can Banks & Fintech incumbents create an enhanced mobile experience for the connected consumer of today? Will the banks be able to compete with nimble startups and aggressive payment tech firms in the Mobile Commerce and peer to peer transfers race?
Banks have been a little late to the party, but it seems to me that they are catching on. We have seen hundreds of banks across the world launch mobile banking and other apps that are beginning to see adoption go high. But what has been interesting to see is formation of councils and consortiums of banks such as Paym in UK and NPCI in India to deliver nationwide peer to peer transfers and payments. Some of the mobile payment apps offered by groups of banks, consortiums, councils or even third parties (building for banks) have been discussed below.
ClearXchange: It is the first network in the U.S. created by and for financial
The ClearXchange service does not move funds
'Our goal is to provide convenient and safe financial services options for our customers,' said David Owen, ecommerce
The five banks address more than half of P2P payments market in the U.S. Each bank has the ability to control how clearXchange appears on their respective websites and mobile apps. The financial institution can continue to drive and maintain its own customer experience and remain the center of their customers’ financial lives. Enrolled customers conduct transactions on the bank’s sites and receive support from their bank regardless of where a transaction is initiated.
Zapp: Zapp, a British mobile payments startup, recently partnered with 5 major banks – First Direct, HSBC, Nationwide, Metro Bank and Santander – to offer its services directly to consumers without the involvement of any carriers. Zapp is a mobile payments startup formed by payments infrastructure operator VocaLink. Merchant acquirers Optimal Payments, WorldPay, Sage Pay and Realex have already signed up for the service. These four processors’ customer base combined, includes 60% of UK merchants.
IMPS India from NPCI: Immediate Payment Service (IMPS) is an instant , interbank electronic fund
The authentication is enabled via MMID or Mobile money
Some of the recent developments around IMPS include:
Stats indicate that cumulative number of transactions have grown from 700,000 to over a million in 2 months time. More than 50 banks are already onboard. Top 3 leading MMID issuers include ICICI Bank, Axis Bank and SBI. During this phase 94.7 Mn MMID’s have been issued (that is more than population of several countries) and the total transaction numbers have gone up by around 400,000.
Digicash: Digicash, the bank led payments service, has expanded its QR-based mobile payments platform. It now includes new POS beacons that support QR Code, Bluetooth Low Energy (BLE) and NFC technology. The new Digicash Beacons are being tested in Luxembourg, Europe. The test is being conducted ‘under field conditions’ by certain banks – Post, BIL and BCEE at Cora supermarkets; as well as a few convenience stores and Apple reseller Lineheart. The first SEPA payments with Digicash using the Beacon concept have been successfully performed in the last weeks according to them. This video gives you an overview of Digicash Beacon Payment:
Bankinter: In 2013, Spanish lender Banktinker and Seglan developed a mobile based payment solution to enable customers to securely and instantly create a onetime-use debit or credit card on their smartphone. Bankinter announced later in February 2014, that the Mobile Virtual Card (MVC) solution was ready for commercial launch around Q2/Q3 2014.
Blackberry has been the company leading Host Card Emulation technology, and we are glad to recognize their major contribution to HCE-based mobile payments. Google later announcement (Nov/13) about HCE support on their new Android 4.4 Kit Kat operating system has allowed us to build a wide enough commercial proposal for our customers. We are convinced that iOS and Windows Phone will incorporate HCE very soon, Jacobo Díaz, Director of Innovation at Bankinter, stated at the time. The Mobile Virtual Card solution eliminates the main difficulties that have slowed the commercial launch of NFC payments and make it in compatibility with the standards of the financial industry on which many banks have invested along the last 10 years.
Paym: A couple of weeks back, I had written about Paym – a new service is all set to enable users of Britain’s nine biggest banks to send money to each other via their mobile phones. It was announced that Paym would go live on April 29th meaning users may never have to ask anyone for their current account number or sort code by the end of this month. Registrations began on 2nd April 2014, for the 30 Million users of Barclays, Bank of Scotland, Cumberland Building Society, Halifax, HSBC, Lloyds Bank, Santander and TSB Bank. Danske Bank users however, can register from April 25th. Metro Bank and Ulster bank are two others that are finalizing their plans to join.
On the security front the company says, that your details are held securely and are fully protected by data protection laws. The only information stored will be the details needed to send or receive payments.