A host of British retailers have jumped on board Apples mobile payments platform including Transport for London, McDonalds, Waitrose, M&S, Boots, Starbucks, Lidl… nothing surprising there really but its the support its getting from the major UK banks and credit cards that is more surprising – Natwest, HSBC, RBS, Nationwide to name a few with the notable exception of Barclays.
The big news is that like existing contactless payment systems – payments will be capped to £20 but will rise along with others to £30 in September. This may change later with Apple having separate agreements directly with retailers and banks.
The system looks to replace the credit card in the contactless payment system with a virtual credit card on your apple device. Retailers will not have to install new payment hardware as the system works with existing contactless payment systems.
Apple Pay also allows payments within apps as well as being supported by some website payment gateways.
I can’t help but think this is going to impact upon Paypal’s business as consumers may see this as a way of unifying their spending in both the real world and the intraweb.
Apple thinks the system is more secure than the traditional method of revealing your credit card details as it says “Every time you hand over your credit or debit card to pay, your card number and identity are visible. With Apple Pay, instead of using your actual credit and debit card numbers when you add your card, a unique Device Account Number is assigned, encrypted, and securely stored in the Secure Element, a dedicated chip in iPhone, iPad, and Apple Watch. These numbers are never stored on Apple servers. And when you make a purchase, the Device Account Number, along with a transaction-specific dynamic security code, is used to process your payment. So your actual credit or debit card numbers are never shared by Apple with merchants or transmitted with payment.”
Ultimately we think that anyone running an e-commerce site should pay attention and enable Apple Pay as soon as they have support through their Payment Service Provider or as soon they launch a Paypal style checkout button.
Supported UK Payment Service Providers on launch: