Barclays Contactless Mobile gives the bank’s Android customers a way to make contactless payments directly through the Barclays mobile banking app. Rather than supporting a third-party mobile wallet such as Android Pay, Barclays is introducing its own payment capability, allowing eligible credit and debit cardholders to use their smartphones at contactless terminals.
The approach reflects a broader decision facing financial institutions as mobile banking and mobile payments increasingly converge. Banks can integrate their applications with third-party wallets or develop their own payment capabilities, potentially giving them greater control over the customer relationship and the mobile banking experience.
Barclays is the UK’s first bank to introduce an in-house contactless payment service for credit and debit cardholders with Android smartphones.
The bank previously announced its intention to add the HCE-based payment feature to its existing banking app, and said it would be introduced in June.
To date, Barclays has declined to support Google’s Android Pay, preferring to push its in-house Contactless Mobile service to account holders.
Mobile Banking and Mobile Payments Continue to Converge
The push for financial institutions to expand their mobile banking and payments presence continues. These initiatives are the result of the convergence of mobile banking and mobile payments, and banking customers’ expectations that they can use their mobile devices for most every transaction in their financial lives. To respond to this demand, many FIs are seeking to offer new and novel features, many of which include the melding of mobile banking and mobile wallet capabilities.
Banks Choose Between Third-Party Wallets and Branded Payment Solutions
In some cases this includes the integration of FI mobile banking apps with third-party mobile wallets and contactless payment solutions, and in other cases, they want to offer their own differentiated solutions. Some FIs are working toward offering a branded experience where their name and brand are front-and-center, allowing them to offer a differentiated experience consistent with their brand and market vision.
As customers become accustomed to managing more of their financial lives through smartphones, mobile banking applications are evolving beyond traditional functions such as checking balances and transferring funds. Adding contactless payment capabilities gives financial institutions another opportunity to make their apps a central part of customers’ everyday financial activity.
Barclays Contactless Mobile also demonstrates how some banks may choose to compete with third-party mobile wallets rather than simply integrate with them. By keeping contactless payments within its own application, Barclays can maintain its brand at the center of the transaction while offering customers the convenience they increasingly expect from mobile financial services.
Overview by Ed O’Brien, Director Banking Channels Advisory Service at Mercator Advisory Group
Read the full story here
