Barclaycard announced a partnership with Vocalink last week that debit card aficionados will want to watch. The product partnership involves VocaLink’s Pay by Bank app. As discussed in Banking Technology, this is a mobile app that allows consumers to pay for things through their phone without card credentials. Instead, consumers will connect directly to their bank accounts:
Pay by Bank app, created by VocaLink’s payment innovation team Zapp, will allow shoppers to pay for goods and services on a mobile device, without the need to enter credit or debit card details.
What makes this launch of Pay by Bank important is that Barclaycard also has the merchant distribution to bring to the table making adoption success more plausible. Consumers can open the app, log into their bank’s mobile app, check their balance and authorize the purchase transaction. Merchants receive their payment almost immediately which is a welcomed feature, as is circumventing the card networks:
By partnering with VocaLink, Barclaycard will work with its merchants to provide an ecommerce gateway – to authorise and process payments made through the app. This means that when a transaction is made, the payment is taken from the shopper’s bank account and deposited into the retailer’s account in “almost real time”.
This and other similar product launches may signal a decline in debit card use, but not its demise for two reasons; Mastercard is poised to purchase VocaLink and Mastercard has a vested interest in preserving the use of debit cards, plus as the payments industry knows, consumers and merchants are slow to change their purchase habits.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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