David Yates, chief executive of VocaLink, the company that sits at the heart of UK payments, says the key to success is to make transactions as easy and friction-free as possible
VocaLink pioneered electronic payments in the 1960s and has been at the forefront of payments innovation ever since. Today, VocaLink technology offers universal connectivity between UK financial institutions, and its services touch the life of every person and business in the UK with a bank account.
What started as a utility company owned by the banks has grown into a major power within the British economy, offering multilateral payments clearing and designing, building and operating world-class, real-time payment clearing systems and ATM switching platforms. “We are the payments hub for the UK, connecting with every bank, for all domestic electronic, non-card payments,” says Mr Yates.
In the UK, one of the most exciting things we have seen is the launch of Paym a service funded by the Payments Council, which offers person-to-person mobile payments and is powered by VocaLink’s real-time payments technology. The initiative allows individuals to send, receive and move funds directly from account to account, via their mobile phone and without the need for sort codes or account numbers. With more than 2.25 million registrations to date and £44 million transferred via the service since its launch in 2014, there is clearly great interest in the service and a burgeoning interest in mobile in general.
Our objective is to make payment systems at the heart of e-commerce and m-commerce more invisible and frictionless
The accomplishments of VocaLink have not gone unnoticed and the success of UK payments initiatives has attracted attention from around the world. Consequently, VocaLink is fast becoming a major force in international payments. VocaLink technology and expertise helped introduce real-time bank transfers in Singapore. The FAST service, which has been operating for more than a year at 100 per cent availability, has built on the success of the Faster Payment Service. As well as push credits, it includes debit requests in real-time, making Singapore one of the world’s most advanced payment markets.
“We continue to see a worldwide movement towards real-time payment systems and there is significant international interest in VocaLink’s capabilities,” says Mr Yates.
With the exponential global growth in e-commerce and m-commerce, banks and their customers are looking for new ways to pay that are easy to use, affordable and deliver instant value. VocaLink has invested heavily in real-time technology that empowers people and businesses to pay who they want, when they want. In practice, VocaLink’s real-time technology provides a backbone for the UK economy. As well as providing the processing power behind the Faster Payments Service, real-time technology is the ideal platform to develop innovative payment solutions that reduce transaction friction and offer a much improved customer experience for consumers.
One such capability currently being developed is Zapp, an application that integrates bank systems with the world of e-commerce. Consumers and businesses can use Zapp to conduct e-commerce and m-commerce directly from their bank accounts with the highest standards of simplicity and security, while offering both certainty and control. Zapp puts financial control firmly into the hands of the consumer, even providing an account balance before a purchase is made. Small businesses and merchants will be able to improve their cash flow and tighten control, while offering a more engaging user experience. There is already great support for Zapp from banks and retailers, and the service is due to launch later this year.
“The key to success is to make payments as easy and friction-free as possible. The elegant simplicity of Zapp aims to build customer loyalty and reduce the customer drop-off rate, to ensure more business gets done,” says Mr Yates.
Economies across the globe are realising the benefits of moving towards real-time payments technology, and with its experience of building and delivering domestic and international real-time payment solutions, VocaLink is perfectly placed to help make immediate mobile payments an international reality.