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Are you Apple Pay ready?

The industry’s most talked-about mobile payment method has arrived in the UK. With its seamless customer experience and Apple’s trademark cool-factor, Apple Pay is generating a buzz from businesses and consumers alike. The new contactless, mobile & digital-wallet service is, until it becomes mainstream, a method of differentiation for e-commerce and POS retailers, so if you want to be ahead of the curve, now is the time to get on board.

Why UK merchants should be excited

There are several reasons why UK merchants should be queuing up for Apple Pay, but the first thing to note is it’s not all about increasing the volume of sales. A major draw for businesses in offering Apple Pay is it endows them with high-value, borrowed brand equity. Apple is a high-quality experience brand that is innovative and cool, which rubs off on associated companies. It is also likely that, because they enjoyed the experience with all its associated coolness, you will get repeat sales as they come back for more.

Secondly, although initially not about achieving volume sales, being able to process Apple Pay transactions will enable you to target shoppers with high purchasing power. Early indications from retail in the US show that the average transaction value (ATV) for Apple Pay is coming in significantly higher than the average ATV. Use of Apple Pay will be spearheaded by this elite but profitable group and it is in merchants’ interest to help drive adoption by making the “Apple experience” available.

In addition, industry data shows the UK leading the world in the use of mobile payments, all the more encouraging for UK merchants wondering whether to get themselves Apple Pay enabled or not. In fact, the UK stands head and shoulders above the global averages when it comes to making mobile payments: in Q2 2015, 45% of online payments in the UK were made using a mobile device, far above the global average of 29%. Couple this with the fact that worldwide Apple has a 65% market share of online mobile payments, split roughly 50-50 between iPads and iPhones, and the UK represents a great opportunity for the new payment method. 

It’s also worth noting that since its US launch in September 2014, Apple Pay transaction data shows that transaction success rates are amongst the highest across all payment methods. This should reassure merchants that they won’t be faced with the usual technology teething problems.

Why shoppers will be excited

The UK’s love affair with mobile payments is not only due to its advanced mobile infrastructure and device landscape but also the population’s willingness to try new payment channels – and there is every indication that this pioneering attitude is likely to continue.

For those who can afford the latest iPhones, iPads or an Apple Watch, using Apple Pay to buy items will surely produce a feeling of satisfaction if only because, for a certain length of time, it will place these lucky few into an elite group. Because the UI (user interface) is impressive and the IAP (in app process) is smooth, it is easy to use and this also positions Apple Pay as the payment method of choice for those who can. Forgot your wallet? No problem! In fact, I wouldn’t be surprised if many people pretend to have left their wallet behind just so they can use Apple Pay.

What merchants should look for in an Apple Pay technology partner

As this is a native omni-channel payment option, look for a payment partner offering an integrated solution that offers support across both in-app and in-store Apple Pay payments. The benefit of being able to accept payments both online and in-store is clear– it maximizes customers’ ability to make purchases over a choice of channels.  By having one partner and one system for both channels, merchants will be able to gain holistic business insight from comprehensive reporting covering all transactions.

Users and merchants both benefit from the fact that Apple Pay is much faster than paying with cards. This is because when activating Apple Pay, users only need to input their credit or debit card details just once during set-up. In-app purchases are paid for with just one touch and the app can be used right away; merchants also benefit from a must faster payment process.

The early adopters catch the customer

For merchants, Apple Pay’s arrival in the UK couldn’t come at a better time. A recent report by the UK Cards Association tells us that use of contactless payment has tripled in the last year to £2.32 billion across 319 million transactions and there are already 250,000 contactless payment terminals ready to go across the UK. Add to this the fact that the iPhone accounts for over 40% of smartphones sold in the UK and things bode well for merchants wishing to capitalize on the inevitable draw that being able to pay via Apple Pay will have for early adopters.

As with any new payment technology, the growth of the merchant user base goes hand-in-hand with the growth of the consumer user base. The more that join on each side of the equation, the more the virtuous circle climbs. We do know that the surge of enthusiasm for contactless payment, coupled with Apple’s indisputable street-cred and the spending power of its customers, positions Apple Pay as a must-have for businesses that wish to remain at the cutting-edge of payment innovation and have their merchant brand associated with the innovation of Apple.


Comments: (5)

A Finextra member
A Finextra member 15 July, 2015, 10:29Be the first to give this comment the thumbs up 0 likes

The power of brand is truly amazing. If I hear you right; people will go out and spend hundreds of pounds buying a new iPhone, just so they can spend more money on buying more stuff, in order to make cool payments that then costs the retailer more.  And all this just because it is more cool to use ApplePay than their bank issued Debit/Credit Card?

Amazing - it actually reminds me of a fairy tale - 'The Emperor’s new clothes'. I wonder if there are any little boys around.....

Or maybe I am missing something?



Myles Dawson
Myles Dawson - Adyen - London 16 July, 2015, 12:29Be the first to give this comment the thumbs up 0 likes

Hi, I have to agree with you that the brand is incredibly powerful. Apple just sucked me into buying an Apple Watch without thinking about it and I now have yet another Apple device with no use case, although it is quite convenient for buying a sandwich at lunch!

The simplicity and convenience of using Apple Pay for in-app payments and in-store will become just one of the factors people consider when looking at their next mobile device, but in a world where the capabilities of the hardware are converging, it is another feather in Apple's bow.

By the way, Apple Pay is not more expensive to the retailer; depending on their previous setup, it is likely to be cheaper and more secure.

A Finextra member
A Finextra member 16 July, 2015, 13:38Be the first to give this comment the thumbs up 0 likes

oh is it true?

Myles Dawson
Myles Dawson - Adyen - London 16 July, 2015, 18:18Be the first to give this comment the thumbs up 0 likes

Certainly true with Adyen, no additional costs.


A Finextra member
A Finextra member 20 July, 2015, 14:26Be the first to give this comment the thumbs up 0 likes

If starbucks has apple pay and Cafe Nero does not.... I am still buying my coffee from Cafe Nero regardless of what watch or contactless application does, or does not exist, in either of the two coffee shops....  Cool is no substitue for Good.  Cash works,  so do contactless cards... dont confuse the USA with the UK - consumers here trust the security inherent in EMV... American consumers are telling the banks they were too slow moving away from Mag stripe....  and voting with their watches!