Barclays and Halifax are two of the British financial institutions leveraging VocaLink’s new Pay by Bank application – which enables customers to conduct mobile transactions and check their account balances – reflecting the rise of standalone, bank-branded payment platforms.

Bank of Scotland, Halifax, Barclays and Lloyds Bank have all teamed up with VocaLink Group’s Zapp payments innovation team to serve customers the Pay by Bank mobile app, a platform that instantly transfers funds from customers’ bank accounts to merchant accounts in real-time. Users can check the status of their account balance before making a smartphone-enabled purchase, which will occur through secure digital tokens.

“Tokenization has become key to multi-channel and, in particular, digital payment plays,” said Jon Squire, CEO and founder of CardFree. “It adds both a layer of security and anonymity for the customer, while reducing fraud for merchants.”

On-the-go banking
The Pay by Bank app taps into each participating financial institution’s security platform to verify first-time users, as well as any consumer making a mobile purchase. This enables users to feel a greater sense of security when conducting smartphone-enabled transactions through an app or in a merchant’s store.

Individuals will be able to glance at their bank account balances before they check out, allowing them to manage their spending more easily.

The Pay by Bank app – developed by payments innovation team Zapp, a part of VocaLink Group – functions similarly to mobile payment platforms such as Apple Pay and Android Pay. However, the fact that the platform adapts to specific banks’ security methods may give it a leg up among the stiff competition.

According to a recent report from Adobe, mobile banking is struggling to grow in the United States compared to other countries as millennial and Gen X customers focus on the quality of a bank’s app when deciding where to do business (see story).

Although Apple Pay and its Android counterparts are still heavy-hitters in the mobile commerce sector, many individuals find more ease in using their bank of choice’s app, due to the long-standing relationship and trust they associate with that institution.

Several other heavyweights in the financial industry are also cottoning onto this rising trend.

For example, Visa is strengthening its stronghold on mobile payments with the introduction of the Digital Commerce platform, which offers financial institutions such as Webster Bank and PNC Bank the ability to roll out their own consumer-facing apps (see story).

Real-time payments
The Pay by Bank app enables funds to instantly transfer from a customer’s bank account to a merchant’s account in real-time. Additionally, the payments leverage secure digital tokens, which encrypt consumers’ personal financial data.

This means their credit card details will not be revealed to retailers during checkout.

Barclays will be the premier bank to implement Pay by Bank payments into its Pingit app this fall, with others set to soon follow.

“With some of the largest banks in Britain supporting this scheme, and VocaLink’s omnipresent rails,  customer adoption and merchant support are sure to follow,” Mr. Squire said.