UK iPhone users unsure on Apple Pay

We will find out on 14 July whether that is true :)

Whilst I respect Forrester, I somehow doubt that iPhone users don't trust Apple for sub-£20 payments.

Couple of issues here:

• Apple Pay is a contactless payment solution at present - as opposed to one of the more established on-line and inApp payment methodologies
• Apple Pay has little relevance to retailers at present as it is just a payment methodology which their existing contactless terminals will accept in the same way they accept contactless cards
• Value add to merchants will only take place if (or when) Apple Pay is linked to loyalty and merchant basket level data analysis - which gives rise to privacy issues that Apple has already said it does not want to get involved with
• Apple is competing against an established contactless environment in the UK where consumers are used to using the relatively convenient and frictionless experience of contactless card for low value transactions and (in London) the tube; as against the relatively cumbersome requirement to use a phone (or watch) having authenticated use prior to tap/swipe

Scaling will be a feature of contactless limits, upgrading terminals to accept higher value transactions and the added value functionality that Apple could bring to the payment journey.

In response to the 4th point about established contactless environment its arguable that using ApplePay is more convenient than a normal contactless card if you need to get the card out of a wallet.

To use ApplePay, you dont have to tap or swipe, you just have to have your thumb on the fingerprint reader (not press the button). So the process for using (e.g. on the tube) would be get phone out of pocked with finger on the button, wait for gate to open, put phone back in pocket. If you otherwise need to get your card out of a wallet then ApplePay is less friction.

i have read that the iWatch will work when the new o/s comes out in a few months - so lets see if that works as usabiility could swing things ( or of course not )

James, holding a finger on TouchID - without pressing it! - during morning rush hour (i.e. you have to hold your phone firmly not to drop it) could be VERY problematic! That's why Apple Watch makes more sense, but then where is the advantage of biometrics (from retailer and issuer points of view)?..

Apple should have implemented a "secure" mode on Apple Watch (i.e. confirmation of "back on my wrist" via fingerprint) which I suggested back in March 2013 - see the penultimate para.

Anyone who has used the London underground at peak times will be familiar with how "pressured" you are at the gate to get through quickly, especially with a large crowd behind you. Taking out a £600 phone and operating it in this environment will make a few people think twice about using regularly. Likewise on a night bus. Apple Watch solves this to some degree of course.

True - i think we need to see how quick it is on the underground - i just think if the auth is quick it will be simpler than taking card in and out of wallet (which i do at the moment) - the operation is just holding a finger on it which isnt too hard (I do it automatically by now when i take out of pocket in order to unlock phone quickly)

I use my Samsung Galaxy on the Tube all the time - using Vodafone Wallet - there is a noticeable delay between the device interaction and gates opening (compared to Oyster) but I believe that is the case for most open loop visa/Mastercard cards.

Apple could change the process to only require Biometric authentication for low value transactions but that is part of their marketing spin. 

There's no real time auth going on in the transit transaction model. I suspect the delay is TfL doing a luhn check.

I thought the merchant never got to know the card # in the case of an Apple Pay transaction. Does TfL do a Luhn Check without the card # or for something else?

The variability is down to the quality of the ICC - cheaper modules seem to take longer to respond to C-APDU requests than others. Luhn calculation is not particularly CPU intensive and adds very little latency.

I am keen to see Apple Pay in a high value transaction scenario, the biometrics auth should make it quicker than PIN code auth. Also research has it that iPhone users generally spend more ..so for me this will be one area merchants will be watching keenly re: spinning the Apple Pay launch.

I agree with William, the key to unlock the real value here is access to data and loyalty. 

There is no high value contactless with ApplePay from 14th July. In the UK the current floorlimit for contactless is £20, in Q4 this will rise to £30. In 2016 it is anticipated High Value Contactless transactions will be enabled although this is dependent on changes to Merchant POS/EFT-POS estates so it may take time to be completely rolled out...

Going back to the original story around Trust in Apple, surely the point is that Apple has understood the Trust issue in tech firms trying to go it alone? That is why it has partnered with two of the three most trusted types of partners (banks & card companies) and is tapping into the well established and highly trusted card processing system that we have.  And, as has been noted elsewhere, the sense of trust is reinforced by pointedly saying the loyalty / rewards play remains with the card issuers. That's all fine for now but it will be interesting to see if that position is maintained once PSD2 comes into play...

I think this plays well in the Access to Account space as it is a prime example of a tech player disintermediating/disrupting one of FI's main touchpoints with Customers.

Matt - interesting point on Access to Account, but your earlier comment on your Galaxy/Vodafone Passport on the Tube intrigues me - I've just tried again, and my Vodafone Wallet Smartpass is still telling me that paying through the phone isn't available without the new NFC SIM (which itself ruins the point of having an NFC device), and that these aren't available yet either! I trust you don't mean you've stuck the card on the back, so please do let me know how you've managed a work around!

Also, given the difficulty TfL have had managing refunds on bank cards and more recently on bpay 'non-cards', it'll be fun watching them track back on an Apple Pay uncompleted journey!

Ian - 'all fine for now' as you say until PSD2 comes out, but the kick off of EBA early adoption is 1st August!

On the original article as a whole, it will also be interesting to see how low that 27% falls when the inevitable avalanche of frauds hit here, as they have seen in the US.

Andrew, what's the problem with TfL refunds (and bPay)?

Andrew - you need a SIM Swap - go into your local Vodafone branch and they will give you one free of charge and transfer your number for you. Vodafone are in the process of launching a Tokenization service so you can load any UK issued Visa card - with the Tokenized credentials stored on the SIM, you will need to select your preferencial "card"/top of wallet card. (No sticker required...).

NB not sure whether it came up before, but ApplePay can be used for transactions higher than £20 (it is not subject to the contactless limit if biometric auth is used) provided the merchants configure their terminals to support high value contactless:

From Visa Europes 'mythbusting mobile payments':

http://www.visaeurope.com/applepay/

http://www.visaeurope.com/media/images/mythbusting%20mobile%20payments%20-%20july%202015-73-27089.pdf

"Terminals have the ability to accept high value payments – payments over the £20
contactless threshold – provided that there is a cardholder verification (for example Touch ID as
is used in Apple Pay for all in-store transactions) and the retailer has activated the terminal to
accept high value mobile payments. While there may not be many places that accept high value
payments in the UK when Apple Pay launches, we expect the expansion of shops, cafés and
restaurants that accept these transactions to happen very quickly with mobile payment services
now increasingly commonplace across Europe."

Mythbuster eh? How about we put it to the test. I'm guessing the number of merchants out there that have implemented a two-tier structure for Contactless acceptance will be relatively low - as this is likely to confuse front-line staff and customers. Tempting to buy an unlocked iPhone 6 to prove but I am quite happy with my Vodafone Wallet on my Samsung Galaxy.

haha yes good point - I guess I was more interested that there was some technical solution in place rather than it being exactly the same system wise as a contactless payment - I would wonder whether anywhere has implemented it

Well if you haven't seen the press already, looks like at least Pret are offering transactions over £20 via ApplePay (they say limitless...!)

https://twitter.com/Pret/status/620916121995120640 

Along with Kremes N Krust, Pret was the only other merchant I remember in Canary Wharf that accepted contactless cards back in 2009. Seems like Pret has maintained its lead on contactless by doing whatever it takes to accept > GBP 20 Apple Pay payments!

It was a pretty smart marketing move at least I think to be able to get extra promotion on the day it launches

You can just see the headlines in 12 months time - Large number of iPhones stolen at TFL station gates in rush hour.

BTW if your phone is stolen , there are no ticket booths open and you have no cash, how do you get home?