Preparing for Mobile Payments

Banker Resource
April 8, 2014 — 1,467 views  
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Recently, ZAPP, UK’s leading mobile payment brand, announced partnerships with some of the leading financial institutions in the United Kingdom including HSBC, Nationwide, Metro Bank to offer mobile payments to 18 million customers. The idea behind the partnership is to provide customers with a convenient yet safe way to make payments for the goods and services purchased. These payments can be made using the already existing account of the customer with the bank with the help of the customer’s mobile device.

Mobile banking is fast emerging as a new age trend among customers who are able to make real-time payments using various kinds of mobile banking applications. These applications developed by leading banks and financial institutions allow for secure payment transfer to take place between the customer and the merchant. These apps literally serve as digital or mobile wallets for customers.

Best practices and required infrastructure for mobile banking

When a financial institution decides to offer mobile banking solutions to its customers, it needs to ensure that relevant infrastructure supporting such services is in place. 

Regulatory issues: Only those financial institutions and banks which are licensed and supervised in the particular country and have a physical presence in that country are legally permitted to offer mobile banking services to their customers.

Registration of customers for mobile service: Banks and financial institutions need to create a proper documentation based registration system that requires physical presence of customers wanting to start using mobile banking services offered by the bank. The complete details regarding terms and conditions of the mobile banking service should be communicated to the customer once registration is done.

Safe technology and security standards: The most critical aspect of the provision of mobile banking services is Customer Information Security and the operations underlying it. Banks and financial institutions must make sure to use secure technology that safeguards customer information thereby ensuring integrity, non-reputability and authenticity.

Inter-operability services: It is important for banks offering mobile banking service to ensure all mobile service networks are covered with respect to the mobile banking services. A customer using any mobile network should be able to make real-time payments using the services offered by the bank without any issues.

Inter-bank transfer transactions of funds: A 24x7 robust operational infrastructure must be in place to support a country-wide framework of mobile banking that facilitates inter-bank settlements.

Banks can also decide on a monthly transaction limit for the customer. This can be done taking into consideration the bank’s own risk perception of the particular customer.

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