UK banks seek to Zapp Apple with digital payment services

A worker demonstrates Apple Pay inside a mobile kiosk sponsored by Visa and Wells Fargo to demonstrate the new Apple Pay mobile payment system on October 20, 2014 in San Francisco City

Britain’s largest high street banks are launching digital payment services in an attempt to retain customers and fend off growing competition from the technology giant Apple.

Barclays has signed a deal with the digital payments service Zapp, enabling customers to make online transactions through the “pay by bank” application on mobile devices.


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The tie-up comes a week after Apple Pay was launched in the UK, threatening to disrupt banks by allowing people to use their credit or debit cards via their phone, rather than having to dip into their account.

Barclays is the only big high street bank in the UK not offering Apple Pay as it attempts to compete using Pingit, its own payments application. The app allows people to send payments to each other and pay bills through mobile devices.

HSBC, First Direct, Nationwide, Santander and Metro Bank have also signed up to provide digital payments through Zapp.

Card providers such as Visa have launched their own digital wallets to stave off growing competition from new digital payment providers. allows people to make online purchases without having to punch in their card details each time.

Barclays will incorporate the “pay by bank” app within Pingit by October that will allow customers to make purchases from retailers online as well as peer-to-peer payments.

Anyone with a bank account and smartphone is able to use Pingit, in an attempt by Barclays to boost the mobile payments service.

The addition of “pay by bank” means Barclays’ corporate customers operating in retail, transport, utilities, local authorities and financial services can gain access to the app as a way to receive payments.

Barclays will be competing in this space with new digital payment companies such as Worldpay, Elavon, Optimal Payments, Realex and Sage Pay in offering UK merchants the ability to receive payments through digital apps.

J Sainsbury, Asda, House of Fraser, Thomas Cook and Shop Direct are among a number of large British retail brands that have signed up to Zapp for customers to make mobile payments.

More people are turning to mobile, which has overtaken branches and the internet as the most popular way to bank. Figures from the consultancy firm Caci show that customers look set to check their current accounts on mobile devices more than 895m times this year, exceeding the 705m branch interactions.

Cyber security is of increasing concern, as new ways of making payments create new interception points for fraudsters.

Zapp said the payments used secure digital “tokens” so that customers never revealed their financial details or bank account information to merchants when shopping.

Barclays said its mobile app and Pingit had been downloaded more than 5m times, and there had been more than £4bn in payments and transfers.



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