In a move that reinforces Barclays’ (NYSE:BCS) image as an innovator in the banking industry, the U.K.-based global banking giant is all set to unveil a new mobile payment offering to its customers in the U.K., allowing them to make purchases by simply scanning QR codes on advertisements.  The mobile app called Buyit, seeks to draw from the popularity of the Pingit app which Barclays launched early last year – extending payment services beyond the person-to-person support in Pingit to include payment to retailers. ((Barclays Pingit now available to all, Barclays Press Releases, Apr 12 2012))
We maintain a $22 price estimate for Barclays’ stock, which is around 20% above its current market price. Concerns about the impact of the slowdown in Europe on the region’s banking institutions as well as questions raised by U.K.’s regulators about capital shortfall in the country’s banking industry are largely responsible for this price difference.
Barclays has an established track record in coming up with technology-centric ideas to make banking services more easily accessible for customers – a position it cemented for itself by being the first financial institution to adopt the use of the now ubiquitous ATMs. Over the years, Barclays ushered in contactless payment solutions and also launched the first contactless mobile payments service.
Early last year, the bank released Pingit – a mobile app that allowed its customers to transfer money into another person’s account simply using the recipient’s mobile number and by mid-2012, the bank began offering this service for free to everyone in the U.K. with a bank account and a mobile phone.  Pingit’s ease of use spurned immense interest in the U.K. – forcing competitors Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) to come up with similar offerings of their own.
With Pingit’s success by its side, Barclays is now keen to extend the offering to make retail purchases with the new app Buyit, which will allow users to place orders by scanning QR codes seen with advertisements in magazines and on billboards. The app will also allow customers to make utility bill payments by scanning attached QR codes. 
All that said, now comes the million dollar question – so what’s in it for Barclays? After all, the payment services provided to customers through Pingit and Buyit are free. But unlike Pingit which cannot be monetized directly, Buyit’s success will allow Barclays to forge partnerships with retailers to use the mobile payment service; generating per transaction fee revenues of it. In any case, both apps which clearly target the current tech-savvy generation should indirectly result in an increase in Barclays’ customer base over the years – allowing the bank to make money through the various other banking services and products it offers.Notes:
- Barclays extends mobile payments to retailers with Buyit, Finextra, Jun 19 2013 [↩] [↩]
- Barclays launches first service for sending money by mobile phone number, Barclays Press Releases, Feb 16 2012 [↩]