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Zapp mobile payments system gets boost in UK as major retailers come on board

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Zapp, a British mobile payments outfit that partnered with several major banks earlier this year, has announced a raft of major retailers that will accept payments through its service both in-store and online.

On Wednesday, [company]Zapp[/company] said that starting in 2015 Asda ([company]Walmart[/company]’s U.K. subsidiary), [company]Sainsbury’s[/company], House of Fraser and catalog firm Shop Direct would all accept payments through Zapp, as would others including Spar, Clarks, [company]Thomas Cook[/company], Best Western hotels, and utilities such as Anglian Water and Bristol & Wessex Water. Some charities, such as Oxfam, have already signed up.

What’s more, point-of-sale systems providers such as the ubiquitous [company]Verifone[/company], as well as online payments processors such as [company]Klarna[/company], have also said they will work with Zapp.

This really does seem to represent broad retail industry support for Zapp in the U.K. — an unsurprising development in many ways, seeing as it’s a subsidiary of VocaLink, one of the largest players in U.K. payments infrastructure. However, Ovum analyst Eden Zoller said more retailers would need to sign up if mobile payments are to truly take off.

Here’s what Zoller added in a statement:

One of the appealing things about the Zapp solution is that it is technology agnostic, so merchants and other parties are not locked into NFC and can instead opt for lower cost alternatives such as QR codes or Bluetooth Low Energy beacons, which are typically a more favored option among retailers. Zapp has yet to make its business model public but it is promising that transaction fees will be less than cards and other payment methods, which is another crowd pleaser for merchants. Zapp will have to deliver on this promise or risk retailer disappointment.

The interesting thing about Zapp is that the banks it’s partnered with intend to integrate it into their mobile banking apps, obviating the need for customers to download an extra app. Because it offers real-time payments, Zapp is also promising that merchants will get their money more quickly than usual.

There was supposed to be another big player in the local scene: Weve, a mobile wallet and marketing joint venture of the big U.K. mobile carriers that signed up MasterCard as a partner (and that does require an extra app.) However, Weve abandoned its mobile wallet plans last month, choosing to focus instead on a wave-and-pay model.

With [company]Apple[/company] Pay set to launch in the U.K. next year, the carriers will probably concentrate on pushing the Weve app on Android devices. Zapp, meanwhile, looks like a safe bet across platforms due to the support it’s already secured throughout the retail and payments industries.

Not all the big banks are on board with Zapp, though. [company]NatWest[/company], [company]RBS[/company] and [company]Barclays[/company] are notably absent, and it’s probably worth noting that Barclays already has a heavily-promoted mobile payments app called Pingit. [company]PayPal[/company], of course, also offers a mobile payments app in the U.K.

This article was updated at 3am PT to include Zoller’s quote.