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Barclays differentiates contactless payments offering with speed, card replacement

Barclays Bank continues to jockey for a meaningful role in mobile payments in Britain, most recently with plans to update the Barclaycard Android application to enable tap-and-go payments and provide services unique to the space.

Barclays, which has been aggressively pushing forward its own mobile payments strategy over the past couple of years, has not yet integrated Apple Pay, unlike some of its competitors in Britain. Barclays is hoping to gain a competitive edge by also offering unique services via the app, such as a real-time replacement service for lost or stolen cards.

“Barclays is in a unique position in the UK as they have a major presence on both the issuing and acquiring side of the transaction,” said Thad Peterson, senior analyst at Aite Group. “Barclays has approximately 30 percent of UK merchants as customers so they immediately get retail distribution.

“Therefore it’s much easier for them to scale to critical mass, which is essential for a successful payment initiative,” he said.  “With the high penetration of contactless, the addition of Barclaycard and Barclays to mobile proximity in addition to Apple and the others, I expect that the UK will see fairly rapid adoption of mobile proximity.”

Real-time card replacement
The app update, Barclaycard claims it will be the first financial services company in Britain to introduce contactless payments from NFC-enabled Android phones from its own app.

Customers in Britain will be able to use their phone to make contactless payments of up to 30 British pounds without a PIN and up to 100 British pounds with a PIN.

The real-time replacement service – a market first, according to Barclays – will enable users to download lost or stolen cards instantly onto the app so they can continue to make contactless payments using their phones without a break in service.

To report a card lost or stolen, app users can call the contact center for free from the app.

Barclays is also promising to provide the easiest and quickest way in the market to make contactless payments from a phone.

Connecting with mobile users
Once users have activated the contactless payment functionality, they will be able to make payments without needing to open an app, enter a PIN or verify with a fingerprint.

Per Barclays, slightly more than 40 percent of smartphones in Britain are NFC-enabled. That number is expected to rise to 85 percent by 2019.

The financial services company also reports that contactless spending in Britain has grown by 150 percent in the past 12 months, with the number of transactions up 134 percent.

The news comes as financial services continue to look for a way to ensure they have a meaningful for the next generation of consumers as mobile disruption opens up opportunities for disintermediation by software giants and others.

In July, Barclays updated its bPay wristband strategy with a key fob, a sticker that can be adhered to a smartphone or other flat surface and a mobile application, enabling users to make and manage contactless payments (see story).

The financial services firm also continues to builds its Pingit mobile peer-to-peer payment offering.

“For other banks, I would expect that other banks will adopt HCE but it’s going to depend on the degree to which their solution can remove friction and deliver a user experience that is equivalent to Apple and Android,” Mr. Peterson said.

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York