everything you always wanted to know about apple pay
TRANSCRIPT
Everything you always wanted to know about Apple Pay...
...but were afraid to ask
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Apple Pay is a payment technology combined with a wallet application that enables consumers to use their Apple devices and an associated payment source, such as a credit or debit card, to make payments just by touching their device to a reader.
Apple Pay is available in the US, UK, Canada, and Australia currently, but job postings by Apple combined with their bullish attitude when talking about the technology show they are committed to a global roll-out.
As of January 2016, Apple Pay is available on the iPhone 6, 6 Plus, and later, Apple Watch-compatible devices (iPhone 5 and later models), iPad Air 2, iPad Pro and iPad Mini 3 and later.
What is Apple Pay?
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How does it work?First the customer enables a payment method from a supporting bank on their Apple account. Then, with a device that supports Apple Pay, they can use it as a contactless payment device, just like a contactless card with one key difference: a fingerprint is required from the user to authenticate the transaction. In another mode of operation, Apple devices with a built-in fingerprint scanner can make use of Apple Pay for on-line payments, using the user’s fingerprint to authenticate and secure the payment.
Which card providers/banks use it?
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The majority of UK banks support Apple Pay, including:
• American Express
• First Direct
• HSBC
• Halifax
• Lloyds
• MBNA
• NatWest
• Nationwide Building Society
• Royal Bank of Scotland,
• Santander
• Tesco Bank
• TSB
• Ulster Bank.
Barclays bank is a notable exception and they have recently released their own alternative to Apple Pay in the shape of their bPay app. Barclays have pledged to support Apple Pay in the near future, however.
What are the benefits to the consumer?Convenience is the key factor, allowing the customer to make payments in participating locations just using their phone. No need for a purse or a wallet, simply touch and pay with their mobile device. Security is another, as Apple Pay payments are secured by two factors: a combination of access to the device and the biometric authentication of a fingerprint.
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What are the benefits to the retailer?
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Crucially, Apple Pay makes use of the existing contactless payments infrastructure, being a variant of NFC technology. That means that as the world’s leaders in contactless adoption, the UK is already perfectly placed to accept Apple Pay payments in most cases, without additional cost. You can 9 contact Apple merchant services to get the appropriate Apple Pay icons to let your customers know you support it and you’re good to go.
Additionally, as Apple Pay is secured, that enables the pithily entitled Consumer Device Cardholder Verification Method or CDCVM for use with Apple Pay payments. This means that you can enable payments of greater than the usual £30 limit. Even more importantly, by accepting CDCVM merchants shift the liability for fraudulent transactions away from themselves to the payment provider, reducing their exposure to chargebacks and other related costs. You can read more about how to enable this on 9 Apple’s page on the topic.
Apple are guarded with their figures, so it’s tricky to say for sure exactly how well received the technology is. We do know, however, that there are at least 2.9 million Apple Pay compatible devices in use in the UK as of 2015, with that number only set to increase substantially with every new Apple product release. Combined with the UK’s wholehearted acceptance of contactless payments in general it’s looking pretty likely that Apple Pay will carve out a sizable chunk of that payment space in 2016.
1 in 10 UK card payments were contactless by the end of 2015.
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What’s the uptake like?
What are the alternatives? There are far too many to be exhaustive in listing them, however some noteworthy competitors are:
Samsung Pay – Apple’s main rival in the Smartphone space has their own NFC offering
Android Pay – Apple’s main rival in the Smartphone OS space (yes, that is a different space!) had another bash at the digital wallet despite their lack of success with Google Wallet.
Both of these Android-focused alternatives should be hot on Apple’s heals in entering the UK market this year.
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Next instalmentWe hope that you’ve enjoyed this introduction to Apple Pay and as always, if you’re interested in this or any of the other topics we talk about please head over to our website: www.gwdevices.com and get in touch for a chat.
Stay tuned for the next in the series of Everything you always wanted to know about... due in April 2016.
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