Apple has been working hard to make the contents of your briefcase redundant, one at a time. And today it has launched its latest assault – this time, on your wallet. Apple Pay allows you to pay for items costing up to £20 with a simple tap of your iPhone.
But how does this work, and what are the chances you’ll be switching cash for contactless technology in the near future?
What is Apple Pay?
Apple launched its Apple Pay system in the UK this morning. At the moment, it allows people to pay for items costing up to £20, just by tapping their iPhone on a store’s card reader. From September, this total will rise to £30.
The technology has been available in the US since last October, but has yet to build much momentum. However, hopes are high that the technology will take off in the UK. According to a recent report by Visa Europe, the British are by far Europe’s biggest users of contactless payment technology. In March 2014, British shoppers spent £243m using contactless payments – a total of 52.6 million transactions.
How does it work?
The technology behind Apple Pay is known as near-field communication (NFC). A chip embedded in the iPhone allows you to make a payment simply by holding the device within an inch of a contactless reader, and touching your finger on the phone’s Touch ID. It’s a similar approach to that used in contactless credit and debit cards. Users are also able to pay for goods and services online with the new technology, with many online stores now offering an Apple Pay option to buy things in a single tap.
While this all sounds like revolutionary stuff, bear in mind that – for now – it’s only available to those who own an iPhone 6, 6 Plus or an Apple Watch. However, it’s also possible to make in-app purchases on the iPad Air 2 and iPad Mini 3.
Where can you use it?
The big idea is that, in future, you’ll be able to use Apple Pay anywhere that accepts contactless payment. But as of today, more than 250,000 shops across the UK will accept payment by iPhone.
Apple has managed to get a strong cohort of retailers on board for the launch date, with participating brands including Lidl, McDonald’s, Pret a Manger, Boots, Waitrose and Nando’s. A bunch of others including New Look, Eat, JD Sports and Dune will begin offering the service later this year.
Transport for London has also been named as an official launch partner, which means that users are now able to use Apple Pay to touch in and out of the Underground, Overground and on London buses.
Which banks are on board?
The first banks to support the payment system are NatWest, Royal Bank of Scotland, Santander, Ulster Bank, MBNA and Nationwide Building Society. HSBC and First Direct are lined up to join later this month, while Lloyds, Halifax and Bank of Scotland account holders will be able to use the service from the autumn.
Barclays was the only major UK bank not to partner with Apple on the initiative – largely because of its own venture into contactless payment, known as bPay. However, following criticism from some account holders, the bank has today backtracked and agreed to support the service in the near future.
What are the alternatives?
Apple isn’t the only one to jump on the contactless payment bandwagon. There are soon to be plenty of opportunities to get involved if you’re not an iPhone user. Firstly, Android Pay is due to launch later this year for those with Samsung, LG and HTC phones.
Barclaycard’s equivalent service bPay is set to roll out in July. It comprises a wristband, key fob and a sticker that goes on your phone, meaning that you essentially have three different contactless ways to make a payment. And you don’t need to be a Barclaycard customer to use the service, which is expected to deliver sizeable market share.