Major banks ready their own mobile payment apps

The apps could prove a major competitor for Apple Pay and competing products

Several major national and international banks are planning to launch their own mobile payments apps next year.

The banks would be major competitors to handset makers Apple and Google because unlike others pushing mobile wallet technology, such as mobile phone carriers and retailers, they already have an intimate relationship with consumers and know their spending habits.

"Banks all around the world are working on this right now," said James Anderson, senior vice president for mobile and emerging payments at MasterCard.

Anderson didn't name any of the banks, but said MasterCard is already in conversations with them on how to add mobile payment capability to the existing apps that millions of consumers already have on their phones.

The most likely way will be through a technology called host card emulation, that was introduced in Android 4.4 "KitKat" and allows software apps to emulate the secure element chip found on some bank cards and the iPhone 6. Using software means wider compatibility with phones than if a dedicated chip was required.

The mobile payments market had been relatively quiet until recently. Google Wallet and Softcard, a competitor backed by cellular carriers, were in the market but consumer awareness and interest appeared to be low.

That changed with the launch of Apple Pay on October 20. A million cards were activated in the first three days of use and early adopters have praised its ease of use: users just need to hold their thumb over the iPhone 6 fingerprint reader and bring the device near a terminal for payment to be made.

As a result, competitors are planning their attack. Next year CurrentC, backed by some of the biggest retailers in the U.S., will launch and companies like PayPal are also hoping to expand their footprint in stores.

But an app from a bank might have an edge because it removes a potential hurdle to adoption: unease among consumers that at a third-party is getting access to details of purchases they make.

Read more: Telcos could lose up to half their customers in 2015: Ovum

Apple has stressed that it doesn't see any of the purchases made by its users but Google's system is set up so that all payments run through the company's servers -- giving the company an additional layer of information into the lives of its users.

A bank already has access to this information because of its nature and is presumably trusted by its customers. If a customer has a banking app on their phone, it would suggest they also have faith in the bank's online security system.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags retailconsumer electronicsGooglesmartphonesmastercardiPhoneAndroidfinanceindustry verticalsApple

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?