Zapp, the mobile payments startup formed by UK payments infrastructure operator VocaLink, has announced that major retail chains including Sainsbury’s, Asda, House of Fraser, Thomas Cook, Shop Direct, Spar and Clarks are to use its service to let customers make payments with their mobile phones. Rollout is due to begin in 2015.
Zapp is supported by five UK banks with 18m current account holders — HSBC, First Direct, Nationwide, Santander and Metro Bank — and is technology agnostic at the point of sale.
“With Zapp, money moves instantly from a customer account through real-time payments, which means that cashflow for merchants can be significantly improved,” the company says. “Zapp transactions are a fraction of the cost of cards or other alternative payment methods.”
“Zapp payments work through secure digital ‘tokens’, which mean customers don’t reveal any of their financial details (including bank account details) to retailers when they are shopping. This also means that merchants do not need to store card details or incur the expense of PCI-DSS compliance.
“All Zapp payments will be covered by similar protections [to those] that already exist for debit card payments, ensuring that in the event of goods not being delivered or an issue with a payment the consumer will be covered.”
“Zapp enables retailers to offer a secure, quick and simple way for their customers to pay for goods using just their mobile device and their existing bank account,” the company adds. “Checkouts with Zapp are faster and allow merchants to sell more at lower cost with faster settlement.
“Zapp payments also put shoppers in control of their finances, with no need for multiple digital wallets, long card numbers, new passwords and usernames to remember. From launch, the customers of these retail brands will be able to pay for goods and services using just their existing bank account, a smartphone and a mobile banking app. Customers will be able to see their account balances at the point of purchase and choose different accounts to pay from, thereby staying more in control of their finances.”
A video shows how consumers will be able to use Zapp to pay for online purchases with their mobile phone:
Dune, Best Western Hotels, Starstock, QD Stores and utility companies Anglian Water, Bristol Water, Wessex Water, and Sutton and East Surrey Water have also signed up for the service along with a range of payment providers including Verifone, Klarna, Touch Go, Siemens, Apogee International, Vix Technologies, Global Charge, Just Desire and RSL.
“This broad group of retailers, billers and payment providers will roll out Zapp to more than 35 million customers and represents the largest coalition of retailer support for a new payment method ever announced in the UK,” Zapp says.
“Additionally, almost all major UK acquirers and payment service providers, which represent hundreds of thousands of merchants, are supporting Zapp, including Worldpay, Elavon, Optimal Payments, SagePay, Realex, TrustPay Global and Checkout.com. This breadth of support is unprecedented for a new payment method and demonstrates clearly the market demand for new and innovative ways to pay.”
“We are currently working with banks and retailers to integrate the technology into their systems and provide a great customer experience. Pilots are now being planned ahead of launch.
“We will then invest in launching the brand in the UK market, supported by the marketing efforts of financial and retail partners. The launch will be underpinned by an awareness-raising campaign from us and our backers, supported by tens of millions of pounds in advertising and promotional activity. This will include a consumer education campaign, above the line advertising and promotional activity at the point of sale.”
“We know that the way that our customers shop is changing and we’re always looking at new and innovative ways to improve the experience,” says Jon Rudoe, digital and technology director at Sainsbury’s. “We’re one of the first retailers to sign up to Zapp to give our customers a quick, secure and convenient option to pay – both online and at the till.”
“Zapp supports our long standing commitment to innovation,” adds Paul Fielding, Asda’s group treasurer. “Our customers want to have choice, not only of what they buy but how they buy it, and Zapp will represent a fantastic addition to our payment options.”