Apple’s Arrival Adds Fresh Impetus to Mobile Payments
Although many of my colleagues have been up and running with Apple Pay in the US since last October, it’s now launched in the UK. As with all technologies I prefer to try them before sharing my thoughts and I have to say I’ve been pleasantly surprised by how easy it was to set up and use Apple Pay.
I’m under no illusions that mobile payments will be anything other than a niche way of buying stuff in the near term, but I reckon Apple has a pretty good shot in the UK compared with all its predecessors. The concept of paying for things with your phone has been talked about for years but it’s delivered almost nothing. You only have to look at the failure of Google Wallet in the US or operator initiatives like EE’s Cash on Tap for evidence of this.
So why might Apple succeed where others have failed? Well, in the UK it has several things going for it. The country has one of the most advanced contactless payment networks in the world. The technology is widely deployed and coverage is growing. UK consumers and retailers, unlike their US counterparts, are familiar with the concept of “tap and pay”; it’s not an unfamiliar mechanism that they need to be educated to adopt.
Add to that the huge number of iPhone users in the UK and it’s clear Great Britain is something of a “golden isle” for Apple. Our research suggests that more than half of active users on some mobile networks have an iPhone; even though many won’t have a model that works with Apple Pay, the fierce brand loyalty that Apple inspires could prompt many to upgrade to a compatible iPhone.
The allure of the Apple brand also means everyone wants to work with the company, or is pushed to do so. Barclays bank initially refused to support Apple Pay, instead favouring its own bPay service. Early this morning, on the launch day for Apple Pay and in the face of considerable customer pressure, Barclays tweeted to say that it would support Apple Pay in the future.
Further evidence of Apple’s clout and determination is getting Apple Pay to work with the complexities of the London Transport network and the body that runs it, TFL. Although Apple isn’t the first company to offer such support, its scale means that millions of people travelling around London now can pay for their travel using an Apple device.
In the longer term, I think more and more people will adopt Apple Pay and other mobile payment systems. Why? It all comes down to convenience. The UK is a nation hooked on mobile phones — CCS Insight estimates that mobile phones in use in the UK equate to 102 percent of the population. Most people carry their smartphone with them everywhere and it’s seldom out of arm’s reach.
If a service like Apple Pay is easy enough to use, it soon does away with the need to reach for your wallet or dig around for your purse in a handbag. Just grab your phone, which is usually close by, and pay. In fact, you potentially won’t even need to carry your wallet with you as the payment network expands.
In my experience, using Apple Pay on an Apple Watch is already better than traditional payment methods. I just double press the side button and I’m ready to pay. I can certainly see how that could catch on. But as an Apple Watch user, I accept I’m a very rare case and that if you want to live the ultimate mobile payment dream today you have to spend a few hundred pounds on an Apple Watch. Nevertheless, there are plenty of people with an iPhone that delivers almost as good an experience.
I think we’re at a tipping point for mobile payments in the UK. Of course it’s going to take time, but yet again it seems like Apple is exploiting its unstoppable momentum to kick-start the market, leaving rivals such as Google’s Android Pay and Samsung Pay on the back foot once more.
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