8 ways Barclays flips the script on mobile payments

March 8, 2019 11:23 AM

Barclays plc has spent years experimenting with creative ways to promote mobile payments, and it's not showing signs of stopping.

The U.K. bank has put payment tags into gloves, jackets — even donkey saddles — while also partnering with companies such as Uber to find new ways to reach its audience on mobile devices.

This item is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun, Michael Moeser and Robin Arnfield. Click the links in each item to read more.

bPay and Pingit converge

Valerie Soranno Keating, chief executive officer of Barclaycard, the consumer credit-card division of Barclays Plc, wears the company's new bPay PayBand, a wearable contactless payment device, during a Bloomberg Television interview in London, U.K., on Friday, June 13, 2014. The pound reached the strongest level in 19 months against the euro after Bank of England Governor Mark Carney said the institution may raise interest rates from a record low earlier than investors expected. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Valerie Soranno Keating

Chris Ratcliffe/Bloomberg

The bPay brand is one of Barclays' most experimental projects — it's the contactless payment technology that the company has woven into jackets, built into bracelets and stuck onto smartphones. But it's not the only one.

Pingit, the bank's P2P payment app, was less flashy but more popular, with 3.6 million users compared to bPay's "high tens of thousands," according to the bank.

Thus, it's perhaps inevitable that Barclays is planning to merge the two brands — but while most banks embed P2P in a more conventional banking or wallet app, Barclays plans to give Pingit top billing. BPay users may continue using their wearable products, but they will them from the Pingit app going forward.

The Uber wallet

An Uber Technologies Inc. logo sits on a smartphone display in this arranged photograph in London, U.K., on Friday, Dec. 22, 2017. Uber will be regulated in European Union countries as a transport company after the bloc's top court rejected its claim to be a digital service provider, a decision that could increase legal risks for other gig-economy companies including Airbnb. Photographer: Chris J. Ratcliffe/Bloomberg

Chris J. Ratcliffe/Bloomberg

Barclaycard and Uber’s Visa card, which launched in late 2017, uses its digital advantage in a few ways: Consumers can apply—and get approved—in minutes by signing up directly within the Uber app, a process sped up by having basic customer information already on file. Once approved, customers can shop immediately with a digital version of the card, earning rewards and tracking them in real time via the Uber app.

The in-app money management features harken to the ambitions the ride-sharing company hinted at that year at SourceMedia's annual PayThink conference.

“What we’re working on, I don’t even want to call it a wallet,” said Brian Crist, chief payments counsel for Uber Technologies, at PayThink. “One thing that we continue to look at is trip experience … could you pay for a restaurant, for example? Could you pay for your theater tickets through the experience?”

The card's rewards structure are in line with that philosophy. Like many cards targeting middle-market consumers, the Uber Visa card has no annual fee, and rewards vary based on the merchandise category, emphasizing activities most popular with Uber riders.

An in-app payment card also addresses a major pain point for ride-sharing companies like Uber and Lyft by creating a direct financial relationship with the rider. Lyft has expressed frustration that riders who use Apple Pay only show a token rather than a full customer profile, limiting the company's knowledge of its customer base.

The best part of waking up is payments in your cup

A coffee cup sits next to a customer working on a laptop computer in a Costa Coffee shop, operated by Whitbread Plc, in London, U.K., on Wednesday, May 2, 2018. Whitbread is betting that its faster-growing Costa Coffeechain will compete more effectively against the likes of Starbucks Corp. once separated from the company's hotel business. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Despite the relatively low user base for bPay, Barclays is still thinking of new ways to embed its payments technology into new form factors. In November, for example, Barclays partnered with a U.K. coffee chain to take it a step further by bringing the coffee cup itself into play.

The card issuer has joined forces with Costa Coffee to launch integrated contactless payments technology in a reusable coffee cup that enables users to pay by tapping or waving the cup itself. The cups cost £14.99, with a £1 donation from every sale going to the Costa Foundation.

"Our wearable chip technology allows almost any accessory to be transformed into a smart payment device, unlocking the benefits of speed and ease in everyday purchases," Rob Morgan, head of sales and partnerships at Barclays, said in a press release.

The Clever Cup has a silicon base with a contactless chip that can be detached for ease of washing. Owners can use the cup to make purchases in Costa, or anywhere else that accepts contactless payments.

Palling around with PayPal — for business

Pedestrians walk past PayPal Holdings Inc. signage outside the company's headquarters in San Jose, California, U.S., on Tuesday, Jan. 24, 2017. PayPal Holdings Inc. is scheduled to release earnings figures on January 26. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

PayPal and Barclays formed a strategic partnership in 2018, enabling Barclays customers in the U.K. and U.S. to manage their Barclays and PayPal accounts within each app.

Barclays customers are be able to access their PayPal account from the Barclays online banking portal or mobile app and use Barclays payment products in their PayPal digital wallet to pay online, on mobile or within the app.

As part of the deal, Barclays was able to explore ways to connect PayPal to its Pingit P2P service for U.K. customers. Barclays’ small-business customers in the U.K. are also able to see a snapshot of their PayPal account activity on the Barclays SmartBusiness Dashboard.

Investing in loyalty

Signage is displayed outside the Barclays PLC headquarters in New York, U.S., on Friday, Feb. 22, 2019. U.S. stocks rose along with Treasuries as investors awaited results from top-level trade talks between America and China. Photographer: Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

Barclays is partnering with digital rewards companies as part of its focus on investing in fintech and developing new business models. Its recent investment in Bink, a U.K.-based loyalty platform provider, marks the fourth company in this field that Barclays has partnered with.

Barclays’ investments in loyalty technologies such as Bink are part of its efforts to enhance its mobile banking app. Its other loyalty partners are U.K.-based Flux and Krowd and U.S.-based Kard. In February 2019, Bink closed a £10 million funding round led by Barclays, which took a minority stake in the firm.

“Over 6 million Barclays U.K. customers use the Barclays Mobile Banking app,” said Ruchir Rodrigues, Barclays’ head of digital and open banking. “Bink is an example of how innovative technology can solve an everyday problem for Barclays customers who are retail loyalty program members. The Bink platform will help customers avoid missing out on valuable loyalty benefits in all areas of their spending.”

Instant gratification

A US Airways Group Inc. plane takes off behind American Airlines Inc. planes at Ronald Reagan National Airport in Washington, D.C., U.S., on Monday, Jan. 23, 2012. US Airways is studying a potential merger with bankrupt AMR Corp. that would fix a weak domestic route system at American Airlines and boost revenue, two people familiar with the matter said. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Card issuers have long feared that third-party mobile wallets would erode their brand power by rendering them an invisible part of the payment process — and issuers like Barclays and TD Bank are finding ways to fight back.

As mobile and e-commerce companies set an expectation of immediate service, banks are rising to that challenge by providing card rewards and services in real time. This could be by allowing consumers to get rewards from the moment they apply, or by setting a higher standard for what can be done for those who apply in a branch.

"The risk is having other brands stand in front of the card issuer brand, which becomes commoditized, so it’s really critical to make your brand stand out for utility or other purposes,” Sanjay Sakhrani, managing director with the investment banking firm Keefe, Bruyette & Woods, said at SourceMedia's Card Forum in 2018.

At Barclays, for example, travelers who apply at a kiosk in the airport for the Barclays American Airlines AAdvantage Aviator card can get some benefits on the spot, including the first bag checked free and preferred boarding for that day's flight, according to Bob Highland, managing director of business development and payment networks at Barclays.

“We’re using mobile and digital channels to instantly deliver some credit card benefits the minute people sign up,” Highland said.

Saddle up

donkey

robcartorres - stock.adobe.com

No Barclays contactless payments story would be complete without mention of the donkey saddle.

Back in 2014, Real Donkeys, a donkey ride company that operates in Blackpool in the U.K., added Barclaycard contactless payment technology to one of its saddles.

The system let patrons purchase rides by tapping a contactless payment card against a saddle worn by a donkey named Dillon, according to an article in Travel Weekly. The company approached Barclaycard after it was forced to turn away prospective riders who did not have cash on hand, Real Donkeys owner Mark Ineson said in the article.

Barclaycard has been aggressive in its support of contactless payment technology. In addition to its contactless credit and debit cards, the bank has also issued wristbands, jackets and stickers with contactless payment technology built in.

Know when to fold 'em

SONY DSC

As aggressive as Barclays has been in mobile payments, it has also learned when to jump ship.

Barclays was the first issuer to sign on for the U.S. telcos' Isis mobile wallet during its limited tests. However, the issuer did not did not stay on when Isis went ahead with its nationwide launch in 2013. This was probably for the best, as the Isis name soon became problematic (to say the least), forcing the telcos to change the product's name to Softcard before shutting it down entirely.

Barclays was also a longtime holdout of Apple Pay, which launched in the U.K. in 2015 with the support of key banks including NatWest, Santander, HSBC, Nationwide, Halifax, Lloyds and RBS.

Barclays, of course, had its own mobile payment lineup to defend against Apple's incursion, and it may have also taken issue with Apple's fee structure. But even Barclays could not hold off against Apple Pay's inevitable march.