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Apple Pay UK launch imminent – What does it mean for businesses?

July 13, 2015

Back in October 2014, Apple Pay – the contactless NFC payment method on iPhones – launched in the US, and we looked at its potential for small businesses here in the UK.

The question of whether or not SMEs should integrate Apple Pay with their existing payment systems was left unanswered, as it all depended on the adoption and success of Apple Pay across the pond.

Merchants in the UK will have less time to consider their decision now, as Apple Pay’s UK launch is imminent.

When will Apple Pay be available in the UK?

Leaked documents indicated that the Apple Pay would launch in the UK on Tuesday, July 14th. And now, these rumours have seemingly been confirmed by an accidental tweet by HSBC, which has since been deleted. However, Apple are still refusing to confirm that it will launch on July 14.

Apple Pay’s UK launch will likely occur with an iOS update. Many pundits thought iOS 8.4, released last week, would see the necessary update for Apple, but this wasn’t the case.

What is it?

Apple Pay is a contactless way to pay for transactions at the till, and in apps, without the need for your credit or debit card. It uses the same NFC technology as contactless cards, which you may already be using. You can find out more about what Apple Pay is here.

In the UK, transactions will be limited to £20, which is the standard for debit and credit cards. It’s largely expected that this will rise to £30 by the end of the year.

Apple’s guide to merchants states that there is no limit on transactions imposed by Apple Pay, it’s just the limit set by payment providers and networks.

Where will Apple Pay be accepted in the UK?

As with the US, initially there are a limited number of shops and banks accepting Apple Pay from launch, although this number is undoubtedly set to rise in the coming months as more merchants and providers come on board.

The initial bank partners confirmed for the launch are:

  • American Express
  • First Direct
  • HSBC
  • NatWest
  • Nationwide
  • RBS
  • Santander
  • Ulster Bank

Others are listed as coming soon according to Apple and the banks themselves, likely to be some time in Autumn, and include:

  • Lloyds Banking Group, including Lloyds, Bank of Scotland and Halifax
  • M&S Bank
  • TSB

The Co-operative and Yorkshire banks are currently in talks with Apple, but the big institution currently missing from the list is Barclays Bank.

Initial news indicated that Barclays would focus on its own contactless payment system, bPay but it would be foolish on Barclays’ part to not offer Apple Pay transactions in addition to their own system, and there’s already been backlash from its customers over rumours it wouldn’t accept Apple Pay.

As for physical stores, The Independent suggests that over 250,000 merchants will be capable of accepting Apple Pay, but whether they do or not is a different matter.

The confirmed list of shops that will accept Apple Pay from launch include: M&S, Waitrose, Boots, Lidl, Starbucks, Costa Coffee, Post Office McDonalds, KFC, BP, The Spar, Subway, Nandos, New Look and TfL, the company responsible for tickets on the London Underground and all buses in London.

Notably absent are the big supermarkets like Tesco, Asda and Sainsbury’s. It appears they are currently hedging their bets and seeing how the market fairs.

Apps like Uber, Groupon, Starbucks, Airbnb, Argos, Booking.com, British Airways, Domino’s, easyJet, hungryhouse, JD Sports, Just Eat, lastminute.com, Miss Selfridge, Ocado, Stubhub, thetrainline.com and many more will all also accept Apple Pay.

Will it be successful in the UK?

Early indications, and the impact of Apple Pay in the US, suggest it will be. Polls are already suggesting that customers would go so far as to switch banks if their current provider did not offer Apple Pay.

Reaction in the US saw 1 million activations in the first three days of Apple Pay’s launch, and since then the general consensus has been positive. Set up has been easy, the customer transactions seamless, and overall it has provided a user friendly experience; potentially easier than pulling out your purse or wallet and fumbling for your card.

Any problems generally occurred on the merchant side, and this is potentially where small businesses in the UK may see issues developing too. Staff training may be necessary to ensure everyone is up to speed with how Apple Pay works.

Of course, some hiccups are expected; as with any new technology there are likely to be a few teething problems, but these will ease over time and will be unlikely to affect smaller businesses adopting Apple Pay at a later date.

Given the widespread use of contactless payment in the UK, there are some analysts who believe Apple Pay will be more successful in the UK than the USA, because:

  • The culture of NFC technology is more engrained here, with more merchants already using contactless payment systems
  • There is a larger base of iPhone 6’s, 6 Plus’s and Apple Watches in circulation and compatible with Apple Pay
  • Buzz has already been generated from the US launch, alongside learning experiences for merchants and banks
  • Transport for London is a launch partner, which could see millions use Apple Pay for tube and bus payments on a daily basis.

When should small businesses offer Apple Pay?

There’s still no simple answer for this, and whilst SME’s shouldn’t rush and drop everything to offer Apple Pay, if it’s convenient for your customers, there’s no reason why you shouldn’t.

If you already have a contactless reader and payment system, you can get in touch with your provider and begin accepting Apple Pay as soon as it launches. There’s no additional cost involved for merchants. You can read more about getting started with Apple’s merchant guide.

With Apple Watch selling well and the new iPhone release rumoured for September, there will be more devices in circulation which are compatible with Apple Pay. Even vending machines are set to accept the payment method, with Coke recently announcing its roll out on all new machines in the US.

NFC technology is most likely here to stay, in one form or another, and SMEs with payment systems in place should certainly be looking to accept all forms of it in the near future, regardless of whether Apple Pay is as successful as predicted or not.

About the author

This article was written by ByteStart’s web and technology contributor, Nick Pinson. He is a Director at iWeb Solutions, an e-commerce website design agency based in Staffordshire. Twitter: @iwebtweets

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