Zapp Mobile Payments, which is set to launch in 2015, has made a series of deals with retailers and payment providers. Zapp would be able to target a customer base of around 35 million through these deals. Major retailers like Sainsbury’s, ASDA and other leading UK businesses have partnered with the mobile payments company. ASDA and Sainsbury’s themselves represent a third of UK’s supermarket sector.
This is the largest ever retailer support for a new UK payment system. Zapp allows customers to make purchases both online and at the point-of-sale in brick-&-mortar stores. The mobile payment system protects user data by using secure digital tokens. Zapp fulfills the remittance needs of merchants by offering instant exchange of money.
Earlier this year, Zapp had also partnered with leading UK banks which provide accounts to more than 18 million customers. With retailers now joining in, Zapp can act as a gateway between banks and retailers to process payments. The Zapp mobile app works across multiple mobile operating systems and allows customers to pay online by simply tapping the “pay with Zapp” button on the mobile interface. The backend system takes the payment directly from a bank account via the banking provider’s app.
Zapp acts as mobile wallet for in-store checkouts. It either uses NFC and allows subscribers to simply swipe their phones or scans the bills to be paid via QR codes. Zapp was created by VocaLink , which administers systems like BACS on behalf of banks. VocaLink itself is a consortium of 18 banks and building societies. VocaLink is also responsible for the link network of ATMs and for powering UK’s salary payments. Zapp can be expected to target these areas in the near future.
Zapp facilitates low-value payments by allowing customers to simply wave their phones over a reader. This does not require any authentication and is similar to a contactless card used to make a small payment without having to enter any PIN number. This makes Zapp an effective mobile payment option for transit services which requires commuters to make payments on-the-go. Zapp requires the authentication via a banking app only is the transaction is above a certain amount.
The following illustration shows how Zapp actually works:
The Centre for Economic and Business Research projects that there will be 20 million mobile payment users by the end of the decade, with more than £14 billion expected to be spent in 2018. UK has witnessed a number of innovations in the field of mobile payments. Barclays had launched Pingit in 2012 which offers a P2P mobile payment service. Earlier this year, Paym was launched which makes use of mobile phone numbers instead of bank account details to send and receive money.
But Zapp could possibly have the upper hand in 2015 when it starts actively servicing customers through its wide range of partners. Zapp’s list of partners include:
- Banks: HSBC, Nationwide, Santander, Metro.
- Payment providers: Secure Trading, Checkout.com, TrustPay Global, SagePay, Realex, Elavon, Optimal Payments, WorldPay, Just Desire, RSL, Vix Technologies, Global Charge, Touch Go, Siemens, Verifone, Klarna and Apogee International.
- Utility companies: Anglian Water, Bristol & Wessex Water and Sutton & East Surrey Water.
- Retailers: ASDA, Sainsbury’s, Shop Direct Group, House of Fraser, Thomas Cook, Clarks, Dune, Spar, Best Western, Bravissimo, Pepperberry, QD Stores.
- Charities: Oxfam, Charities Aid Foundation