Barclays Does a Brand Bypass For Its Own Android Payment App

After saying it would not support Android Pay in the U.K, Barclays is leaning on device agnostic mobile technology and its own developers to launch its own payments app for the operating system.

Called Contactless Mobile, the app provides Barclays with an option for Android users. The move is fueled by Host Card Emulation, the technology that allows wallet developers, merchants and banks to bypass the secure element on a handset and let users make contactless payments at Near Field Communication-enabled terminals through an app.

Apple Pay and Samsung Pay operate through NFC and the secure element in the handset, while Android Pay utilizes HCE technology. But the use of HCE doesn't lock Android Pay in with financial institutions that can put their own brand on that technology and avoid engaging in negotiations or debates with handset manufacturers over access to secure elements.

"Barclays did what a number of other issuers, such as BBVA in Spain, Capital One in the U.S. or RBC in Canada, have done in implementing contactless payment capability for Android phones leveraging HCE technology," said Zil Bareisis, a London-based senior analyst for research firm Celent.

While third party wallets, such as Apple Pay and Android Pay, can be relatively easy options to deliver mobile payment services to customers, HCE-based solutions can be delivered as a bank-branded service, Bareisis said."It gives issuers more control and tighter relationships with their customers," Bareisis added. "We expect more banks to follow suit."

Similarly, Barclays also initially did not jump into the U.K. debut of Apple Pay, being one of the last financial institutions to support the iOS-based mobile pay system. It took Barclays until April of 2016, or nine months, to fall in line with other U.K. financial institutions that supported Apple Pay from the start.

But, despite all of the various branded contactless pay options — from wristbands, key fobs, stickers, gloves and jackets — for consumers through Barclaycard technology, Barclays did not have a strong approach for its bank customers using Apple iPhones. That isn't the case with holding back on accepting Android Pay.

Barclays rolls out Contactless Mobile into a payments ecosystem in the U.K. that includes 400,000 contactless-enabled terminal locations, including the London Transportation network that accepts contactless Oyster cards.

"This new payment service is one that we felt would be beneficial to our customers and one of the key things was that it fit right into the Barclays mobile banking app, something that our customers are really familiar with," said Barclays spokesperson Lawri Morgan.

Barclays customers average access to the mobile banking app about 27 times a month, Morgan said.

"It is very easy to use, and it will find the Barclays customers cards and automatically register them for use," Morgan added. The process for payments less than £30 is particularly easy for Contactless Mobile users because it so closely emulates using a contactless card, as it calls for no fingerprint scan, PIN or even opening of the app, Morgan said.

For payments between £30 and £100 [$146 U.S.], the user would also enter a PIN and tap again to complete a transaction.

The release of Contactless Mobile gives Barclays another payment technology advancement triggered through the aggressive innovation from Barclaycard, the card issuing and global payments unit of Barclays retail and business banking sector.

"This is something that has been built by Barclaycard and rolled out earlier this year, but the news now is that Barclays, on the banking side, is rolling it out for its customers within the mobile banking app," Linda Yang of Barclaycard said.