Apple Pay goes live on UK high streets

14.07.2015
Apple Pay has launched in the UK today where 25 retailers are accepting it.

The service, which is already available in the US, allows people to pay for items and journeys via their iPhone, iPad or Apple Watch using contactless payment technology and a near field communication (NFC) chip.

How to use Apple Pay

In order to make a payment through an iPhone the user must hold the smartphone near the contactless reader with their finger on the TouchID. There is no need to open an app. If the user owns an Apple Watch they can make a payment by holding by holding the wearable up to a reader and double-clicking its side button.

The only iPhone that's compatible with Apple Pay at launch is the iPhone 6.

Users can also pay for goods with a single tap within apps. This feature could benefit many of the UK's digital startups that allow smartphone users to buy everything from clothes to food through their apps.

Top10 a hotel search app that instantly finds users 10 shortlisted options is one of the digital firms that stands to benefit. Cofounder Harry Jones said: "We're very excited to be one of the first apps to offer Apple Pay to UK customers, and to help usher in the future of payments in mobile apps, which will change the way millions of people in the UK pay for goods and services. We've always strived to provide the fastest and most secure way to process payments on our hotel booking platform, so it's exciting to see new technology reducing long-winded processes to a simple tap."

Where are the details stored

Apple is storing people's credit and debit card details in Passbook - a native app that is already used to store boarding passes and tickets.

Retailers and restaurants offering the service in the UK include Waitrose, M&S, Boots, McDonalds, while Transport for London is also allowing people to pay for trips in London using the service. A full list is available here.

Research firm KantarWorldPanel estimating there are currently 2.9 million Apple Pay compatible devices in use in the UK.

One thing worth noting is that many retailers won't allow customers to make Apple Pay transactions over £20 (rising to £30 in September).

However, sellers do have the option to update their back-end software systems to recognise fingerprint readings as an ID-check alternative to chip and pin codes, thereby removing the cap.

Sarah Kellett, associate director of consumer facing industries at Fujitsu UK & Ireland, said: "The launch of Apple Pay is yet another step towards the mobile wallet and contactless agenda, and we expect this service will see significant pick up amongst iPhone users. Until contactless becomes more widely available however - on multiple operating systems and devices - the launch of Apple Pay is unlikely to revolutionise the retail payment landscape.

"Having said that, retailers still need to be aware of new payment services such as ApplePay, as these services are allowing customers to make payments from any location at any time, just by using their mobile device. Retailers who fail to see the opportunity with ApplePay and mobile payment services risk placing a barrier at the point of sale. Ultimately the more payment options available to customers, the easier it will be for retailers to make transactions and as a result, sales."

Who is going to support it

Payment card providers Visa, Mastercard and American Express have all registered to use Apple Pay, as have a number of banks, including Ulster Bank, Nationwide, Santander and the Royal Bank of Scotland.

HSBC was due to be listed up until Monday evening but now it claims it's not ready. A HSBC spokeswoman told the BBC that the reason for its absence was not linked to it leaking the launch date over the weekend.

"We're working hard to bring Apple Pay to HSBC and First Direct customers, and they'll be able to use it later in July," she told the BBC.

It's understood that Halifax, Lloyds, Bank of Scotland and TSB will also join soon, as will Barclays, possibly the biggest name not to feature on the launch day list of compatible banks.

In the US, Apple Pay is already used by over 300 banks and 700,000 stores.

Lu Zurawski, head of consumer payments in EMEA at global payments firm ACI Worldwide, said: "There is no doubt that ApplePay is a significant watershed moment in consumer payments. Apple Pay has every chance of being a big hit in the UK, in particular in those parts of the country where contactless payments have already proven to be popular with consumers, such as within the M25 where consumers are benefiting from the 'Oyster' card training effect.

"As consumers become familiar with using phone devices to make purchases, we will probably see a plateau in the issuance of plastic cards in the next few years, followed by a long but inevitable decline of cards into obscurity.

"The implications for UK banks are manifold: Banks that move quickly to adopt Apple Pay will need to carefully consider the economics of this new scheme and how to accommodate other alternatives too, e.g. Samsung Pay, Android Pay or the Zapp platform. Behind the scenes, bankers are trying to work out how to stitch together all these new payments operations, whilst offering their consumers an overall, easy to use service."

(www.techworld.com)

Sam Shead

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