Zapp - we got you.....or had you

[TeaLeaf]

Zapp (owned by Vocalink) hits the press a lot today as a number of major banks announce they are signed up to use it from launch.  

What is it?  
It's basically an electronic payment app plugin that banks will absorb into their banking apps to facilitate electronic payments from your phone.

Wait a second, I already have ways of doing that!
Yes, but the banks did not like using someone else's system, they want us to use this system.

Why do they want us to use Zapp?
Because Zapp is owned by the banks, so they get all the profit from running the infrastructure.  
For example the big dog at Vocalink gets paid over £1m per annum and the average employee salary is over £58,000 per annum.   This from a company that has yet to make an actual profit.  

Who owns Zapp?
Zapp is owned by Vocalink.  Here are Vocalink's main shareholders:

AIB GROUP (UK) P.L.C.
BANK OF SCOTLAND PLC
BARCLAYS BANK PLC
BRISTOL & WEST PLC
BRITANNIA BUILDING SOCIETY
CLYDESDALE BANK PLC
COUTTS & COMPANY
COVENTRY BUILDING SOCIETY
DERBYSHIRE BUILDING SOCIETY
HFC BANK LIMITED
HSBC BANK PLC
LLOYDS BANK PLC
NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY
NATIONWIDE BUILDING SOCIETY
NORTHERN ROCK PLC
SANTANDER UK PLC
THE CO-OPERATIVE BANK P.L.C.
THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY
YORKSHIRE BUILDING SOCIETY

Will Zapp be better than what I already have?
Let's ask Zapp this question and then you decide.   Zapp was described on Radio 4 this morning and their spokesperson gave two examples of how it would work:

Example 1 - From Your PC
You're sat there doing online shopping and add the item to your basket.
Rather than checkout and pay via the PC you click Zapp
This then opens the Zapp app on your phone
You then log in to your online banking system and make the payment.
Are you seriously expecting me to not click on the 'Pay' button from my web browser and use your app instead?

Example 2 - In a Shop
You ask to pay via Zapp instead of usinng cash or chip & pin.
There's an NFC style 'activate Zapp' pad at the checkout which you use.
This then opens the Zapp app on your phone
You then log in to your online banking system and make the payment.
Are you seriously expecting me to not use chip & pin and use your app instead?


Is Zapp going to be more convenient?
I suspect not, certainly not initially.    Once again the banks club together to ensure they profit and deliver us a service which is slower and more labour-intensive than existing systems.    Chalk up another profit win for the banking sector.

I seriously hope they get their act together and simplify the process that was described on the radio.   If it is as described I am at a loss to figure out why I would want to use it - can anyone enlighten me?

I *can* see a market for this, but if I have to log in to my online banking app every time I want to make a micro-transaction then I can't see the attraction compared to chip & pin or other alternatives.  

Risk Warning - Check Your Wallet!
Let's also look out for one more thing.   The last time the banks 'helped' us with chip & pin they tried to shift liability for fraudulent use or failure in their own security systems from themselves and onto the retailer and the consumer.    Who wants to bet that their T&C's do something similar again?   I'll be reading them very carefully.

The promotion:
The promotional video looks real smooth, but I wonder where the 'some sequences may have been shortened' risk warning is?   Apparently you can pay a plumber without having to enter any details of who he is, where he banks, his sort code or his bank account number.   Perhaps your average plumber carries an nfc-style Zapp pad to activate the app and is actually at the breakfast table with the family in the video?  I'm guessing not......

:doh:

[smilodon]

This looks like like the familiar problem of a technological solution looking for an application. As TL says it adds a new layer of activity with no benefit for me. And paying online for goods with a debit card is a stupid risk I'd rather not take regardless of how it works.

I never pay anyone with a debit card on-line ever! There's no way I'm exposing my private bank account to some on-line retailer no matter how many assurances I get. I also rarely use a debit card in shops either, except for the odd small purchase. I make a point of using a credit card every chance I can. If something goes wrong and more money is taken from me or the payment goes through twice or a crooked shop worker tries to steal my money it's actually the credit card that gets robbed and my personal bank account stays untouched. I've not been badly burnt by incorrect debits but I have had a couple of issues and I know a few people who went through hell trying to get their empty bank account re-credited by the bank after some fraudulent use on their debit card. Also my money stays in my account until the credit card bill is due, and then i pay off the lot. The additional interest I get is minimal but it's better than nothing, plus I get lots of points on my credit card spending and have got a few nice things for free in the past after saving up. And there is also the free insurance that comes with all credit card purchases. It seems a no brainer really. Paying for stuff with a debit card when I can use a credit card just seems daft, mobile app or no mobile app?

[Penfold]

I agree. I pay for everything with a credit card. No interest as we pay the balance off in full in month, protected by by credit card protection scheme and I get 1% cashback at the end of the year which means a few hundred quid to spend for free!