Can CloudZync Convert U.K. Consumers To Contactless?

By Pete Rizzo, Editor (@pete_rizzo_)

Will personal trainers, coffee sellers and beauticians drive the future of mobile payments in the United Kingdom? CloudZync is hoping the answer is yes.

The Essex-based mobile wallet developer announced the launch of its Zync Wallet service on August 13. Founded just over one year ago, CloudZync has already signed up 280 London merchants to accept its mobile wallet offering.

This strong U.K. debut suggests Zync Wallet is poised to appeal to merchants, but it remains to be seen whether CloudZync’s features can entice U.K. consumers, the majority of whom have shown a disinterest in mobile wallet products. For example, ePayments software provider Compass Plus revealed in May that only around 10 percent of U.K. consumers are using contactless cards.

Does Zync Wallet have the features to overcome this challenge, or is it be just another U.K. mobile payments startup in an ever-widening field? Here are the pros and cons that could help set CloudZync’s mobile wallet apart from its peer companies, along with major players like Apple Passbook and PayPal Here.

Zync Wallet Is Putting Merchants First

The cornerstone of Zync Wallet’s strategy so far has been merchant adoption, a fact that the company is quick to emphasize.

“We’re built around the merchants’ needs, while the others are based around the technology first,” co-founder Andrew Smith told The Telegraph. “We try to give as much control to the companies as possible.”

Unlike some competitors in its vertical, Zync Wallet does not charge businesses set-up fees or administrative costs for accepting mobile payments. Merchants pay a fee for the service, and can choose between a pay-as-you-go package or a monthly subscription, TechCrunch reported. The media outlet said fees for the former package range from 1 percent to 5 percent.

To increase loyalty, Zync Wallet also allows retailers to set up branded loyalty schemes and personalized deals that can keep established customers returning.

How Zync Wallet Is Courting Consumers

To begin using Zync Wallet, U.K. consumers need only download the company’s free iOS and Windows phone apps. Zync Wallet has said an Android version will be released soon but did not give a more specific timeframe for the launch, Finextra reported.

From there, consumers can transfer funds from their bank account, set up a PIN for the wallet and begin making payments at participating retailers. Zync Wallet displays a QR code when users are ready to make a purchase, and will automatically add rewards points and discounts to the transaction at the point of sale. 

The app also provides users with a personalized pinboard that displays deals, vouchers and messages to users to keep them up-to-date on available incentives.

Could Zync Wallet Succeed?

In addition to the low levels of consumer mobile wallet adoption, Zync Wallet faces other challenges in the U.K. mobile payments industry. Compass Plus found that 40 percent of U.K. consumers aren’t familiar with NFC payments technology, and that they view the payment method as their least secure payments option.

Still, Smith is optimistic that his product’s extra features will be the deciding factor for consumers.

“The payments industry already works… I can quite easily pay with cash, I can pay with cards as they are, so mobile really needs to be an evolution of payments – add extra value to that particular process,” Smith told TechCrunch in an interview. “Just being able to pay on a mobile phone isn’t enough.”