Oracle joins forces with high street banks to deliver mobile payments

Oracle has signed a major hardware and software deal with Zapp, a company that is jointly owned by all the high-street banks and is charged with building a new mobile payments platform, which could be used by consumers and retailers across the UK from 2014.

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Oracle has signed a major hardware and software deal with Zapp, a company that is jointly owned by all the high-street banks and is charged with building a new mobile payments platform, which could be used by consumers and retailers across the UK from 2014.

Zapp is owned by Vocalink, which was set up by the high-street banks to establish schemes such as Link for ATMs and BACS payments. Zapp now aims to put in place real-time payments on millions of people’s mobile phones making it easier to pay for goods and services. It hopes to bypass other wallet applications by providing an alternative that doesn’t rely on inputting card details, but is already integrated with the major banks’ systems, allowing it to be built into banking apps already available in the market.

This will mean consumers won’t have to download a separate application or have extra passwords and logins – they will simply be able to use the app already provided by their bank.

Zapp will be integrated into merchant online and mobile checkouts and can be used at the point of sale for NFC, QR code or any other system that a retailer has implemented.

Zapp and Oracle will build the payments platform on an Oracle software and hardware stack. The Zapp web application and database servers will run on Oracle x86 and SPARC hardware, with the software behind the Zapp mobile payment eco-system being built on Oracle’s database, WebLogic, enterprise service bus, GoldenGate and data integration technologies.

Computerworld UK spoke to Zapp CTO Tom Hay, who explained that Zapp could transform mobile payments for UK citizens because it has got the backing of the major high-street banks.

“Zapp has already got board approval from all of the banks and at the moment we are going around all of them discussing when they are going to be ready to implement it,” said Hay.

“It keeps the banks at the centre of the payment experience, so it will be integrated with the existing banking applications. They will basically be adding Zapp functionality to their existing banking payment apps.”

He added: “It is simpler, there are less clicks involved in making a payment, it is more secure, and it is backed by your own bank so you are dealing with an organisation with you have chosen to trust.”

Hay has targeted what he calls ‘acquirers’ – companies such as WorldPay and Global Payments – which are the intermediaries for merchants wanting to use card schemes. Getting these companies on board means that Zapp has a whole merchant community ready to use the application when it is launched. However, it is also targeting a list of the ‘top 50 merchants’, because it wants big high street names on board using the app from day one.

Oracle is a long-term partner of VocaLink, but this latest deal will see all development carried out on new Oracle kit. Hay couldn’t reveal the total cost of the development project, which has been going on for more than a year now, but did say it was worth “millions of pounds”.

“As you can imagine this is a major project and I’ve got a significant development team – we are due to launch in 2014. The development is phased, but we are gradually moving towards production and as we do this we are moving onto bigger and bigger boxes,” said Hay.

“The final production boxes are still being built, but the pre-production and test servers are already in place.”

With so many stakeholders (merchants and banks) to consider, which is one of the main challenges to mobile payment adoption, Zapp has been working hard to develop user interfaces that integrate easily with third party back-end systems.

“Coping with variations in bank and distributor infrastructures is certainly a challenge. There are lots of different requirements, which have been evolving as the project progresses, but we have been using best of breed agile for development and that has enabled us to keep building in a very structured and controlled way, whilst we are still gathering the final requirements,” he said.

“We have also built on the knowledge that VocaLink has built up over the years, so we got the Link and Faster Payment interfaces. Bringing these together allowed us to define a quality interface for banks and merchants.”

Hay also noted that although banks are notorious for operating on complex mainframes that are difficult to integrate with, because it is a mobile app, it should be easier.

“It’s a challenge, but I think because we are using the mobile channel, which has typically developed over the past five years, we are integrating into the newer parts of the banks and those have already got the interfaces into the legacy systems.”

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