The electronic payments industry is a hive of innovation, and developments are currently focused on injecting immediacy and flexibility into transactions. But the real task, according to VocaLink chief operating officer Chris Rawson, is to do all this with a high level of security that protects both consumers and businesses.
VocaLink, the provider of the payments infrastructure for UK banks, makes its services available through a network of data centres in the UK. At the core of the company’s offering is security and resilience. The VocaLink Faster Payments platform, for example, is “always on” and can be accessed 24 hours a day, seven days a week.
Security is indeed of paramount concern to the payments industry and to major players, such as the UK government and the Bank of England. A National Cyber Security Strategy, launched in November 2011 and backed by £860 million of government funding, is charged with tracking security threats and keeping ahead of developments.
“VocaLink is playing a full part in the strategy,” says Mr Rawson. “We’re speeding up the payments process, reaching out internationally, providing a better mobile experience for private and commercial users, but we never stop thinking about how to maintain a secure environment.
“All our systems have been built with security at their very core. The challenge for providers of highly resilient, always-on solutions is to stay ahead of the game. It’s vital for us to keep our systems up to date with the latest security technology and ensure they surpass international security standards. It is absolutely our bread and butter.”
VocaLink technology powers the Bacs Direct Credit and Direct Debit schemes on behalf of Bacs Payment Schemes, the Faster Payments Service on behalf of Faster Payments Scheme, as well as connecting the world’s busiest network of more than 65,000 ATMs through the LINK Scheme. In short, while most people won’t know the VocaLink brand directly, they will almost certainly have used its services.
Last year VocaLink processed ten billion payments with a total value of around £5 trillion
VocaLink’s systems process more than 90 per cent of UK salaries, over 70 per cent of household bill payments and nearly all state benefits provided by UK government institutions. Last year VocaLink processed ten billion payments with a total value of around £5 trillion – or approximately three times the value of total UK GDP.
The company is continuing to innovate and deliver cutting-edge technology that empowers consumers. “The Faster Payments Service, which runs on the VocaLink real-time payments platform, was a big evolution in the payments industry and we processed nearly a billion transactions in 2013,” says Mr Rawson. “The growth in demand for immediate payments in the UK has been considerable since the service was launched in 2008 and we’re now receiving a lot of interest from overseas.”
Given the consumer demand for efficient and secure real-time payment options, it is inevitable that the technology will underpin a whole new market for user-friendly payments applications. Zapp, a mobile payment technology service, is one such market entrant.
Zapp will be available to 18 million current account holders with HSBC, First Direct, Nationwide, Santander and Metro Bank when it is launched later this year. The main aim is to provide a new and secure means for consumers to buy goods from merchants through banking apps on their mobile phones or tablet computers.
The demand for mobile banking tools is certainly present. A YouGov survey published in January revealed that 64 per cent of people with a bank or building society account prefer to conduct banking online or via a mobile app, compared with 29 per cent who preferred telephone or in-branch banking.
“Using Zapp, customers don’t have to divulge their bank account details, so it’s a much more secure way of transacting between merchants and consumers,” says Mr Rawson. “It’s a great example of a service that targets growing consumer demand for new, flexible ways to pay. All payments made through Zapp happen in near real-time, as well as being completely secure.”
Zapp is good for consumers, because there is no requirement for multiple digital wallets, long card numbers, new passwords and usernames to remember. The added ability for consumers to check the health of their bank balance before they make a Zapp transaction offers a practical solution which is aligned with the government’s desire to combat excessive debt.
VocaLink’s immediate payments capabilities are being rolled out beyond UK borders and are providing in-demand payment solutions enhancing the speed, security and flexibility of transactions in territories around the world.
The company has, for example, formed a partnership with BCSIS, the Asian payments solution provider based in Singapore, to enable banks to offer consumers and businesses the ability to transfer funds between bank accounts in real-time, and to deliver innovative products and services based on mobile and online channels.
“The evolution of real-time payments has become a Holy Grail for territories around the world, and is underpinning mobile applications for payments and a vast array of other services,” says Mr Rawson. “All these provide consumers and merchants with a materially better and more reliable service.”
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