Apple Pay – Breaking in to the contactless payment market

Apple are always at the forefront of development and the age of contactless payments has seen them invent Apple Pay, first rolled out in the U.S.A. and only available in the U.K. since 14th July 2015, it’s usable with major bank issued credit and debit cards and payments are more secure than cash, fast and virtually fraud proof for single transactions up to £30. Apple Pay launched with a £20 limit, this was soon raised.

Apple Pay can be used when the information for cards with contactless attributes are sent to the wallet on an Apple device from iTunes where a card is already in use. Numerous cards can be added to make the tool viable for several cards and purchases. Each card added to the wallet is attributed a Device Account Number and encrypted within the Secure Element, a dedicated chip for near field communication.

The antenna on the iPhone 6 or 6 plus, Apple watch and iPad mean that no apps are required to process a payment. Simply holding an iPhone to the contactless reader with a user’s finger on the Touch ID icon will allow the transaction to proceed, they have other access routes, if the phone is locked a double click on the Home icon will make the wallet function live or a double click on the watch’s side button does the same, and it may also be used quickly in apps.
No card details are saved either on the device or the terminal, they are not sent to merchants and Apple Pay gives every transaction a unique reference number. This offers Apple Pay users maximum security. Unlike credit cards, every transaction on any of the configured Apple devices must be security checked via Touch ID or a pass code.

Reassuringly, if an iPhone or iPad is lost the Apple Pay account can be disabled via “Lost Mode.” The Apple watch payment facilities can be suspended via iCloud.

If consumers want to find all enabled locations in an area this information can be called up on Apple Pay’s map app. They seem to have thought of everything!

It’s believed that with the increase of wearable devices and improvements in biometrics Apple Pay will continue to grow but not totally remove cash from the financial world.

In August 2015 reports showed that less than 3% of iPhone 6 users were taking advantage of Apple Pay from its launch.
Today, over 250000 outlets support Apple Pay and the market is slowly growing, arguably mirroring the slow start that contactless cards endured when they launched in 2008, the current thinking is that when large retailers and apps reach the point at which Apple Pay becomes more popular with their customer bases it will snowball.

It’s worth noting that some of the U.K. banks who were delayed in providing Apple Pay support have now made their services live, as Barclays did in April 2016, so this will encourage growth without hindrance.