Brits ready to switch banks to access mobile payments - Zapp

Brits ready to switch banks to access mobile payments - Zapp

British consumers are increasingly prepared to switch banks to access mobile payments, as anticipation for new ways to pay builds, according to new research from mobile payments company Zapp.

Forty four percent of 2000+ consumers polled by Zapp said they would be prepared to switch accounts if their current bank was unable to offer mobile payments and had no plans to do so. Of these, a third (33%) say they would do so within a year.

The research found that enthusiasm for mobile payments has skyrocketed over the last 15 months. Twenty eight percent of consumers have already used their phone to make a payment (up 64% from September 2013) and 59% say they would use their phones to pay if a simple system existed that didn’t require extra set up.

Consumers say their mobile will become their preferred method of payment before the end of the decade for all kinds of purchases, including: sandwiches (51%); car fuel (52%); and travel tickets (57%). Almost half plan to use their mobile to pay for electronic products and one in five (20%) even say they would buy a house using a mobile payment.

Within just five years, 47% of consumers say they will actively choose to shop online or in-store with a retailer because it accepts mobile payments, with almost a quarter (24%) of these saying they would do so within a year.

Commenting on the research findings, Peter Keenan, CEO of Zapp says: “The success of early forms of mobile payment and the buzz around forthcoming launches of mass market initiatives has clearly whetted consumers’ appetites. This research...suggests banks and retailers stand to gain significant competitive advantage from offering and accepting mobile payments early."

VocaLink-backed Zapp enables real-time payments on people’s mobile phones through their existing mobile banking application. Banks that have already announced their support for Zapp ahead of its 2015 launch include HSBC, first direct, Nationwide, Santander and Metro Bank. Sainsbury’s, Asda, House of Fraser, Thomas Cook and Shop Direct are among the major British retail brands that have committed to the service.

Says Keenan: "I’m confident 2015 will prove a tipping point, as simple, secure mobile payments like Zapp become a reality for millions of British consumers.”

Comments: (10)

A Finextra member
A Finextra member 19 December, 2014, 11:41Be the first to give this comment the thumbs up 0 likes

I *am* switching banks (bye-bye, Barclays - I won't miss you at all, after what you did to a loyal and profitable customer who has been with you for over 25 years...), but not because of mobile payments. With Paym, most UK banks do offer adequate mobile payment service. 

A Finextra member
A Finextra member 19 December, 2014, 11:50Be the first to give this comment the thumbs up 0 likes Minor correction to article " pay bills" I think not " pay builds" .... Regards
Tom Hay
Tom Hay - Payment Systems Europe - London 20 December, 2014, 15:37Be the first to give this comment the thumbs up 0 likes

Alexander, I think Paym is adequate for a rather limited range of P2P use cases. For C2B payments an initial "request to pay" from the payee is essential for usability - a pure push model where the payer has to laboriously key in payment details, with a high probability of error, is not the seamless experience that people expect nowadays. 

A Finextra member
A Finextra member 20 December, 2014, 16:04Be the first to give this comment the thumbs up 0 likes

I agree, Tom.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 20 December, 2014, 18:35Be the first to give this comment the thumbs up 0 likes

@TomH: While I agree, I'm curious to know how the payor will authenticate the "request to pay" as coming from the genuine payee?

Tom Hay
Tom Hay - Payment Systems Europe - London 21 December, 2014, 14:13Be the first to give this comment the thumbs up 0 likes

Ketharaman, the exact mechanism is Zapp's trade secret, but card networks have addressed the same problem (is this transaction from a genuine merchant?) and Zapp can use a similar cryptographic veririfcation approach.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 21 December, 2014, 18:05Be the first to give this comment the thumbs up 0 likes

@TomH: TY but isn't there a crucial difference or two between these two scenarios considering that the payor is the consumer, not Zapp or Card Issuer? (1) In a card transaction, the consumer / payor is already at the authenticated merchant's POS, so s/he doesn't need any more authentication of the merchant (2) In a PULL transaction, the consumer can't "see" the merchant, so how will s/he know that the request to pull money is coming from the right merchant?

I used to face this problem in the UK even in a PUSH transaction where I could select the payee from a list. Like I wrote in a blog post at the time, 

"In the case of my utility bill, ... when I went there (NetBanking portal), I had to select the beneficiary name from a drop down list. ... problem was none of the available names in the drop down list matched my utility company’s name (“EDF ENERGY”)! What options did I find in the drop down list? There was EDF ENERGY ELEC and EDF ENERG LONDON. Well, I was living in LONDON and was trying to pay my ELECTRICTY bill, so do I select EDF ENERGY ELEC or EDF ENERG LONDON?"

A Finextra member
A Finextra member 22 December, 2014, 10:29Be the first to give this comment the thumbs up 0 likes

KS, imagine that, when you are ready to pay (at the merchnats online or physical PoS) you receive an instantaneous request to pay from your bank (through a trusted method on your mobile ) and specifies the payee, the amount and what its for and says "do you want to pay this?" No looking on drop downs or keying in amounts, and NO keying in your bank details; you merely authenticate and say yes to instruct your bank to push a payment. As Tom says the way that that is synchronised is the value that ZAPP adds; its great beauty is that it  creates a transaction  like being asked for cash in a shop and having a pocket banker with you at all times who will pay the merchant on your behalf - in both the real and virtual world.

Tom Hay
Tom Hay - Payment Systems Europe - London 22 December, 2014, 10:47Be the first to give this comment the thumbs up 0 likes

Hi Ketharaman: I suggest you have a look at the Zapp video, it shows that there isn't a problem knowing which merchant the request came from, and no drop-down lists involved.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 December, 2014, 10:56Be the first to give this comment the thumbs up 0 likes

@Anon & @TomH: TY. I now understand how authentication of "request to pay" works! 

Trending