How will UK consumers use Apple Pay?

How will UK consumers use Apple Pay?

David Abbott

Payments Lead EMEA at Fiserv

Views 1336

How will UK consumers use Apple Pay?

15.07.2015 01:00 am

While the introduction of Apple Pay in the UK offers an exciting new payments functionality for UK consumers, Apple faces several challenges if it is to meet a similar level of consumer adoption to that in the US.

The largest of these is the prevalence of card based contactless payments systems already in use with consumers. People are used to tapping their card to buy smaller items, or even to pay travel fares for short journeys. While an iPhone can certainly be used in a similar fashion, there is limited incentive from a consumer point of view to invest in the hardware just for its payments capability. It is also possible that consumers will think twice about using a very expensive mobile phone to very publically pay for items of small value.

It will therefore be very interesting to see how Apple Pay takes off in the UK as opposed to the US. In the US, where contactless payments methods are relatively new, the rate of uptake has been largely confined to early adopters. Consumers have already adopted the technology in the UK, with contactless payment limits expected to rise from £20 to £30 in September. As such Apple could see a faster adoption of the technology, or they may need to make the most of their brand power to explain how this differs from existing contactless payments methods, and why customers should use Apple Pay instead of their contactless card.

From a business perspective, the UK is rapidly moving to a low interchange environment which means that any additional costs for payments processing will go against the market trend for merchants. This is a consideration that cannot be ignored as Apple tries to grow its share of the payments market.  

Despite these challenges, Apple Pay is a highly innovative payment option that will have appeal for both Apple fans and consumers who see Apple Pay as a bonus feature on their smartphones. There have been 12 years of hype around mobile payments, and this announcement represents a real change for the industry. We’re seeing an invigoration in payments across the sector, with emergent payments methods coming to fruition, an uptick in consumer usage and merchants ensuring that they have the latest technology to fulfil transactions. As such this could well be the perfect time for the roll-out of this technology.

Latest blogs

Will Hurst Monevo

How can lenders leverage open banking data to tackle Covid-19 pandemic challenges

We have seen extraordinary levels of Government-backed support made available to the public and businesses alike in responding to the health crisis by our banks through payment holidays, grants and the furlough scheme. While we keep collective Read more »

Nish Kotecha and Noslen Suárez PhD Finboot

How blockchain can help us have trust in the food we eat

Today’s food supply chains are global, connected and generally efficient, but the COVID-19 pandemic has shone a spotlight on areas of weakness. The urgent need for robust and resilient systems and processes has been brought sharply into focus, and Read more »

Chris Miller RSA Security

Back to Normality: Five Steps to Stay Resilient After Disruption

The financial services sector has lived through many global disruptions, but the nature of recent events has put an unprecedented strain on operational resilience; from needing to ensure critical functions could continue with skeleton staff and Read more »

TYRON JONES n/a

How Technology Has Disrupted the Used Car Buying Experience

We’ve seen many fields change rapidly as a result of the integration of modern technological advancements over the last couple of decades. And it looks like more is coming on the horizon as well, judging by current trends. One of the markets that Read more »

Shuvo G. Roy Mphasis

Reboot 1.0: How financial services technology can enable the supply chain to support a post-lockdown boom

Ground control and Captain Tom When veteran Captain Tom Moore decided to walk one hundred laps of his garden before his 100th birthday to raise funds to support NHS heroes battling Covid-19 from the frontline, he never imagined that he would Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel