As the year draws to a close it’s worth reflecting on some of the more interesting disruptions in payments we’ve seen this year. Highlights for me include …
The launch that will perhaps have the biggest impact on consumer payments over time was Apple Pay. Apple Pay takes a lot of the friction out of the transaction process and combines this with much improved security. Whilst it has got off to a fairly slow start in the US, once Apple starts promoting it via handset prompts and merchant acceptance improves, it will start to make a major impact. International expansion is scheduled for 2015 so will be interesting to see which banks jump on board in the UK.
The roll-out of contactless card payments across the London Underground, following the move to cashless travel on buses, is probably the biggest boost to contactless payment adoption we’ve seen since contactless first emerged. This will help contactless payment become a more mainstream payment choice in the London region – I’ve already surrendered my Oyster card!
Moven in New York launched to the public and showed the rich functionality a digital bank can deliver to its customers via an app. Moven has since licensed its technology to Westpac NZ and TD Bank, showing the interest that traditional banks have in delivering an enhanced digital service. I’m hoping we will see a UK Moven licensee in 2015.
The launch of Paym in the UK marked the start of simple, ubiquitous, mobile, person-to-person payments. Being able to pay someone with just their mobile number (no more account numbers and sort codes) was something I imagined many years ago and it’s now a reality, at least for customers of the banks that have got round to launching; and launching both pay and receive (unlike my friends at NatWest!).
One of my personal favourites this year was discovering there is a bank in the UK that has over 180 branches, no counters and offers a service that combines the best of personal banking with decent apps. Handelsbanken must be the best kept secret in UK banking!
Last year I wrote about my experiences with Barclays Pingit and how the digital proposition falls apart when your handset changes. Well it’s happened again but even worse …
I’ve been a long time fan of Pingit because it’s a well designed app that provides useful person-to-person payments functionality, even for non Barclays customers. Plus it now supports Paym mobile phone number based payments which is great for customers whose main bank doesn’t yet offer Paym.
However when things go wrong you realise that although it’s a great app, it’s been bolted onto aging, dysfunctional banking processes and systems. A few days ago my iPhone was replaced by Apple and I duly restored my encrypted backup which preserved all my passwords. My NatWest app continued to work fine, my Capital One app continued to work fine. However Pingit needed to be setup again as the device had changed. Sounds like good security, locking the app to my device, however the only way to now cancel and re-setup the app was to call Barclays – annoying and low tech but if that’s what it takes … This I duly did and my registration was cancelled. I re-registered via the app, completed the micro deposit verification and was then presented with a screen telling me my address couldn’t be verified so I needed to visit a Barclays branch with photo ID and proof of address.
My address was fine the day before; had I been wiped from every electronic database by an electromagnetic pulse? Or maybe the Barclays creaking systems infrastructure couldn’t handle some simple electronic verification checks? I called the Pingit customer service line again but the agent was unable to tell my why I had to have my address verified by a branch. Proof of address could be paper utility bill or bank statement less than three months old and not printed from the Internet! Who still has these? Fortunately I managed to find a council tax bill that was just under three months old – not sure what would have happened if I hadn’t got this one.
I duly visited a Barclays branch where a very helpful lady photocopied my documents, updated the account system and then spent 20 minutes on the phone to a Barclays call centre somewhere getting my Pingit account re-enabled. Yes, 20 minutes to switch me back on!
Pingit should be a hook to persuade customers to move their banking to Barclays but this experience means I could never contemplate using them as my primary bank. The idea that to sign up for a digital app you have to visit a branch is bizarre. There are smart ways to verify identity and address against electronic datasets and I’d be happy to share them with Barclays but for now customers are stuck with friction and frustration; and Barclays is stuck with processes that cost them a fortune.
Originally published on Billing Views.
This week marked the launch of Paym, the mobile phone number based person-to-person payment platform backed by the Payments Council. To use Paym consumers register their mobile phone number with their bank and can then receive funds direct to their bank account via that number. Payments to other individuals are initiated via an existing mobile banking app.
Paym represents the first serious attempt to come up with a ubiquitous replacement for person-to-person cheques; much easier for consumers to make a payment to a mobile number than to a sort code and account number. As Paym forms part of existing mobile banking apps it should gain consumer traction quicker than if a new app was required.
The launch banks and building societies are Bank of Scotland, Barclays, Cumberland Building Society, Danske Bank, Halifax, HSBC, Lloyds, Santander and TSB. Later in the year Clydesdale Bank, First Direct, Isle of Man Bank, NatWest, Royal Bank of Scotland, Ulster Bank, and Yorkshire Bank will join, followed by Metro Bank and Nationwide Building Society later on. Presumably other small banks will join later making Paym ubiquitous for everyone who has a mobile number.
A handy tip – if your bank is late to the party and not one of the initial nine participants, you can get access to Paym by registering for Barclays Pingit. This will link the Pingit digital wallet to your bank account and allow you to send and receive funds via Paym.