News

Operator of UK's Link ATM network branches out

June 25, 2013

VocaLink, operator of the U.K.'s national payments infrastructure, including the 65,000-ATM Link network, is branching out into mobile payments. A new company formed by VocaLink — Zapp — will let mobile phone-toting Brits connect their bank account to their mobile phone numbers in order to make real-time payments directly through their mobile device.  

According to a report by Finextra, participating banks will integrate Zapp into their mobile banking apps and invite customers to sign on to the service. 

With the service activated, consumers simply click the Zapp button when checking out at a participating retailer. This takes them to their bank's mobile app, which will display their account balance and ask for payment confirmation.

The customer enters a 6-digit number generated by the merchant's POS or mPOS device, which the user enters into the phone to complete the transaction.

The Finextra report quotes Fiona Ghosh, payments expert at global law firm Eversheds, who said apps such as Zapp could challenge major card brands, because they rely on direct bank transfers, which are cheaper for retailers than credit card payments that come with interchange and other fees. 

"This is bad news for credit card companies, who are already awaiting the European Commission's ongoing investigations into Visa and MasterCard's multilateral interchange fees," Ghosh said.

VocaLink is currently enrolling banks and merchants into the program and hopes to roll out Zapp in early 2014, when it will target all commerce channels — mobile, online and in-store, Finextra said.

Read more about mobile banking.