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Apple’s British Invasion

Starting with the American Revolution in 1776, the British have made a habit of successfully invading the United States. The outcomes have varied over time.

In 1812 the British Invasion resulted in the White House being burned, and Andrew Jackson being elected President in the 1820s. The British Invasion of the 1960s, on the other hand, mostly netted a lot of fainting teenage girls and a statistically improbable number of little boys named Ringo in the 1970s.

But maybe, just maybe, the 21st century could see the streak snapped with a successful American invasion of Britain.

However, before we can declare a victory that is literally 200 years in the making, Apple will first have to actually win the hearts and minds of British consumers.

So will they do it?

PYMNTS asked some of the leading executives working across the payments space what they think Apple’s odds are across the pond.

On the whole, responses were positive. Apple has some big advantages — strong bank support, better contactless infrastructure, 50K more merchants than it had for its U.S. debut and a horde of loyal British subjects only slightly smaller than the Queen’s.

But it also faces some challenges — some big bank partners are still sitting this out and the U.K. has its own special set of challenges, like very low limits on contactless payments.

So, just what else did the best and the brightest have to say ….

JG - CopyCreditcall’s

Chief Technology Officer, Jeremy Gumbley

The “Year of EMV” is about to be rivaled by the “Year of Apple Pay.” What’s impressive is the sheer volume of high-profile banks and merchants (i.e. the Post Office, Topshop, Nando’s, Nationwide Building Society, Royal Bank of Scotland, etc.) already on board with Apple Pay in the U.K. – with more than 250,000 locations to accept Apple Pay at its launch.

However, what is yet to be seen is how the £20 ($31) limit – rising to £30 ($47) this September - will dampen adoption in the wider retail ecosystem – or, how Apple Watch will add a new layer of security (and complexities) to the payments landscape.

A notable difference between the U.S. and U.K. is that in Europe, contactless payments are more frequently used for small purchase, low risk transactions in high traffic areas as in transportation like the London Underground and buses, which account for 17 percent of all contactless transactions in the U.K., or at coffee shops. One advantage Apple Pay has in the U.S., is its higher limits which make it more attractive to retailers. Also worth monitoring, is how Apple Watch will impact both the adoption of Apple Pay and contactless payments in the U.K. – this will elevate discussions around wearable technologies (that allow payment transactions like Apple Watch) and how it can serve as an important authentication factor when it comes to secure payments.

DarrenEVO Payments International’s

President, Darren Wilson

The launch of Apple Pay in the UK market is a really positive step in enabling consumers move away from cash and cheques to electronic contactless payments in a cost efficient, convenient and secure manner. At EVO we actively support the use of contactless technology for payment acceptance, which we strongly believe helps our merchant customers to grow their businesses and enhance the purchase experience for their customers. In this respect we are expecting Apple Pay to be an important trigger in driving up further the adoption of contactless payments and making it the predominate method to make low value payments in the market.

DA - CopyFiserv’s

EMEA Payments Lead, International Group, David Abbott

While the introduction of Apple Pay in the U.K. offers exciting new payment functionality for U.K. consumers, Apple faces several challenges if it is to meet a similar level of consumer adoption to that in the U.S. The largest of these is the prevalence of card based contactless payments systems already in use with consumers. People are used to tapping their card to buy smaller items, or even to pay travel fares for short journeys. While an iPhone can certainly be used in a similar fashion, there is limited incentive from a consumer point of view to invest in the hardware just for its payments capability. From a business perspective, the U.K. is rapidly moving to a low interchange environment which means that any additional costs for payments processing will go against the market trend for merchants. This is a consideration that cannot be ignored as Apple tries to grow its share of the payments market. Despite these challenges, Apple Pay is a highly innovative payment option that will have appeal for both Apple fans and consumers who see Apple Pay as a bonus feature on their smartphones.

i2c - Copyi2c Europes's

Managing Director, Stephen Grice

Apple Pay has several of the necessary elements in place to gain adoption that the U.S. didn’t have when the product came to market. A large number of retailers and banks are participating in the launch so we actually may see a higher percentage of iOS users trying the service. And there is more ubiquity in terms of consumer use of contactless in the U.K., whereas the U.S. is just getting used to this type of payment mechanism. The real challenge for Apple will be simply having enough market share of iOS users versus Android. Apple has less adoption in the U.K. currently than in the U.S., so they will need to work hard at increasing that first, followed by consumers using Apple Pay.

Mahindra - CopyMahindra Comviva’s 

Senior VP and Head of Mobile Financial Solutions, Srinivas Nidugondi

We expect Apple Pay to witness restricted growth initially, which would be attributed to two factors. First, the limit of GBP 20 will restrict the usage to only micropayments. Second, the service isn’t expected to catch on immediately amongst notable retailers such as Tesco, Asda and Sainsbury owing to delay in readiness for Apple Pay acceptance.

However, we believe that Apple Pay is eventually going to gain greater traction in the UK, compared to the US. This is primarily because the acceptance network supporting contactless payments is already established in the former.  Moreover, we believe that an increasing number of merchants will upgrade their terminals to accommodate high-value transactions. These factors will help drive Apple Pay’s uptake in the UK.

MC - CopyMasterCard U.K. and Ireland’s

Head of Emerging Payments and Acceptance, Scott Abrahams

We expect Apple Pay to build on its success in the U.K. In July when it launches, unlike in the U.S., it will be doing so into a market where consumer adoption of contactless transactions is well established. Every day in London alone, 1.2 million journeys are paid for using contactless cards and devices on the city’s transport network. The U.K. is more developed than the U.S. from a contactless acceptance perspective, too. Apple’s own estimates are that today there are 250,000 locations in Britain which accept "tap and pay." MasterCard is taking that further, we have mandated that across Europe all terminals need to be enabled to accept contactless from 2020. Initial constraints may be due to the number of people owning Apple’s devices which support the new service, and the number of contactless terminals which accept higher value payments via Touch ID. However, both of these will fall away over the coming months.


Managing Director, Michael Doron

We believe that consumer adoption of Apple Pay in the U.K. - and transaction volume - will tick upwards at a faster rate than in the U.S. First of all, total smartphone penetration – and Apple’s share of the smartphone market – is higher in the U.K. than in the U.S. Contactless card payments for low-value transactions have gained traction and continue to rise every quarter, so there is already a level of comfort and familiarly with one-touch payments at the point of sale. Finally, Apple Pay will launch with acceptance at some of the U.K.’s largest chains – and these chains are near ubiquitous in major urban centers (specifically London) where iPhone penetration is highest, spending power is greatest, and where convenience rules supreme. We expect that payment providers and merchants will move quickly to enable in-app purchases with Apple Pay, something that PAY.ON supports with a White Label Apple Pay SDK.


Co-founder and President, Ted Fifelski

Apple Pay has all the ingredients for a successful launch in the U.K. First, the U.K. has a significant penetration of the iPhone and soon the iWatch. The banks and payment networks are lined up to support the introduction of the service. Additionally, the U.K. is ahead of the U.S. in EMV implementation, which means more connected NFC-based terminals will allow a large number of merchants to securely implement Apple Pay, and without the backward compatibility burdens to support magstripe implementations.

Also, Apple Pay has a real and measurable value proposition for consumers and merchants. It has a better user experience with high security and less friction. For financial institutions, Apple Pay is well positioned to bring mobile payments to ecosystems that have been long experimenting with pilots and smaller scale implementations. And the inclusion of the payment networks as a core part of the solution guarantees the support and promotion to the key stakeholders.

There does remain an important question that needs to be addressed. Currently there are preset limits for the transaction amount over the NFC interface. With the additional security measures that Apple Pay brings to the table, it may be time to reconsider those limitations to match the best Apple Pay has to offer.

ThreatMetrix copyThreatMetrix’s

Chief Products Officer, Alisdair Faulkner

Apple Pay has one thing going for it that no other wallet providers have had in the past. Consumer base and brand loyalty. The U.K. also has one thing going for it that the U.S. launch did not, a consumer base that is not addicted to swiping a card and is already familiar with NFC technology whether it be buying a pint or tapping their Oyster card on their daily commute on the Tube. This consumer and merchant readiness, combined with a more concentrated banking sector that has had the opportunity to learn from the onboarding and associated fraud rates of U.S. banks bodes well for Apple Pay adoption and usage.


VP, Strategy & Business Development, Ysbrant Marcelis

Having recently lived in London, I believe that there are four factors that favor accelerated adoption of Apple Pay in the UK market. First, iPhone penetration is roughly the same as in the United States but with greater density. Second, the rate of contactless terminalization is higher than in the United States, with a more concentrated merchant base. Third, there is more significant consumer familiarity with contactless payments – with numerous issuer and Telco-based models implemented in the market over the last 5 years (albeit with limited success). Lastly, Apple Pay can leverage massive acceptance of contactless payments within the Transport for London (TfL) public infrastructure system – which reported more than 18,000 contactless transactions per day since launching last September. Despite these advantages, the UK will also see some of the same challenges as in the U.S. These challenges are centered on driving a product proposition that delivers value in addition to convenience. Success will, ultimately, depend on the ability of Apple to migrate and drive value up the stack to a broader set of commerce players that are inherently local to the market. In that sense, the true test will be whether Apple can create a value proposition that inherently drives usage with the average UK consumer at the local pub, grocery store, or market.

VisaVisa Europe’s

Executive Director of Mobile, Jeremy Nicholds

Visa Europe believes that 2015 is a major inflection point that will put mobile payments into the hands of consumers at a scale we have not seen before. The announcement that Apple Pay will soon be launched in the U.K. is a significant milestone for this new era of mobile payments.

With more than 400,000 Visa contactless terminals in the U.K. and 2.6 million throughout Europe, the infrastructure is in place for Apple Pay users to be able to use this new service in their favorite shops and restaurants – anywhere contactless payments are accepted.

And the consumer demand is there for fast and enthusiastic uptake. Last week, Visa Europe released the results of a consumer study that predicted mobile payments will take off during the next five years, with daily usage expecting to triple and the amount spent increasing, as well. In fact, Visa Europe predicts that the amount spent each week will exceed £1.2 billion by 2020. In the U.K., nearly half (47 percent) of those surveyed want to use their phones as a form of payment while shopping with nearly as many (45 percent) who want to use it when they go out to a pub or restaurant. As expected, a significant number (40 percent) would like to use their mobile as a form of payment during their daily commute – which is borne out by the popularity of contactless on the TfL network.




Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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