Walmart's (NYSE:WMT) U.K. subsidiary Asda is just one of several major retailers to throw its weight behind a new mobile payment system that could spell trouble for PayPal.
Zapp, the system in question, helps both shoppers and businesses streamline the payment process, but it's the slew of partnerships the mobile app has managed to secure that really raises eyebrows. Asda is joined by the likes of Sainsbury's, House of Fraser, ShopDirect and Best Western hotels, all businesses agreeing to accept Zapp payments. And banks including HSBC, First Direct, Nationwide, Santander and Metro Bank have signed on as well.
That lineup reflects the kind of broad support that mobile payments have often lacked, and it provides the kind of flexibility of use they sorely need to take off. The system's own architecture helps make it as widely useful as possible, too, especially for retailers.
"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," Eden Zoller, an analyst for research and consultancy company Ovum, told Gigaom.
Zapp also promises lower transaction fees than credit cards and real-time payments, which should keep retailers happy. The system could also benefit from partner banks integrating it into their mobile banking apps, eliminating the need for users to download yet another app.
It wouldn't be the first time a promising mobile payment option started out brightly before folding, but the excitement for Apple Pay has created a new wave of enthusiasm for mobile payments. Walmart turned down the opportunity to partner with Apple Pay, but Zapp could prove to be the kind of system that builds a convenient bridge for shoppers to get used to mobile payments, and that could leave PayPal out in the cold.
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