In a recent meeting with TechMarketView, David Yates, the CEO of Vocalink, the operator of the UK banks payments system, presented a clear vision of how their operation is evolving and how it can revolutionise the UK mobile payments scene. To lead this change, Vocalink has set up a new subsidiary, ZAPP.
Payments between bank accounts are facilitated by the Vocalink clearing network and with the introduction of the Faster Payments Service this can be done almost instantaneously. Credit card transactions are managed through separate networks, e.g. the VISA network, which although carrying less traffic in terms of numbers of messages and value of transactions, generate significantly greater revenue for participants.
Vocalink has developed another layer of intelligence to its operation, by creating a mobile proxy database to link a mobile phone number to the bank account details of a user. This system will facilitate near real-time transactions at a fraction of the current cost of using the credit card networks and will be in use in early 2014. This will provide a new dimension for mobile commerce for consumers and small businesses, attracting higher levels of business and revenue. ZAPP will provide the commercial and marketing vehicle for this operation and will offer services to consumers via the banks’ smartphone apps as well as mobile Point of Sale and management services to SMEs. Oracle will supply the platform underpinning this operation.
Vocalink’s initiative shows that the more established banks will be able to offer something new and exciting in mobile payments, enabling the banks to leverage their trusted position and the scale of their current operations. The credit card companies and the emerging players will however not relinquish their position and this potential opportunity without a fight. This will be one of the more intriguing battles to be fought as mobile payments and m-commerce take off over the next year or so.