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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags retailsmartphonesGoogleAppleAndroidiPhonefinanceconsumer electronicsindustry verticalsmastercard

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

Father’s Day Gift Guide

Brand Post

PC World Evaluation Team Review - MSI GT75 TITAN

"I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it."

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?