Competition is heating up in the sector as banks and app providers grapple for a share of the new and potentially huge market.
The Payments Council has commissioned VocaLink, which administers systems like the BACS transfer process, to create a database of bank customers.
The aim is for all banks to use this when processing mobile payments, creating a more efficient network and boosting adoption of the service.
At the same time VocaLink has set up a new firm, Zapp, which will launch its own app using the data for person to person money transfers and transactions like the payment of bills.
While there is no rule against this, banks fear the app is unfairly marketing its links with Vocalink, presenting itself as the industry-backed solution – a position which only applies to the database, not Zapp.
“Vocalink was paid to setup the database which all banks can tap into, then Zapp grew up on the side of that,” said a source from Barclays, which has led the market so far with its PingIt app.
“They are meant to be separate entities with Chinese walls between them. Zapp is meant just to be another app in the store, but by blurring the lines it is marketing itself to sound like an industry body.”
As a result banks have complained to the Payments Council about the behaviour.
However the Payments Council is not planning to take any action, focusing instead on the creation of the database to improve the market for all participants. And Zapp denied it is doing anything wrong.
“We are bringing an industry-wide solution which in my view is of great value to merchants. Think how confusing it is to deal with different apps from different banks – we bring a solution to it,” said Zapp boss Peter Keenan.