Apple Pay

UK Apple Pay Contactless Spending Limit Challenge

Apple Pay’s expansion into the U.K. will start next month with 250,000 merchant locations accepting the mobile payment option. And while some say that 2015 will be “the year of Apple Pay,” Apple’s recently published FAQ on how things will actually work has dampened the general mood a bit, reports 9to5Mac.

“Retailers who wish to accept unlimited contactless transactions from digital devices, should of course get the latest terminal software,” MasterCard told Pocket-lint. “The majority of British merchants who currently accept contactless are running systems based on the £20 limit, so they will need to update their terminals if they wish to accept authenticated contactless transactions at a higher value.”

So to increase the spending limit, merchants will have to upgrade their point of sale hardware via cardholder verification methods (CVMs). It also means that to allow payments through Touch ID – which offers the same or better authentication than a four digit code does, according to 9to5Mac – new payment processors will be needed.

It’s indeed difficult for merchants to keep up with Apple’s fast moving technology. While the technology first emerged simply as a way for users to unlock their iPhone, Apple began implementing the identification process in its Apple Pay as a way to conduct one-touch payments. Apple is now also exploring how customers could use TouchID-supported POS at retailers, allowing shoppers to pay via TouchID and a PIN without having their smartphone present.

The good news, however, is that the growing popularity of contactless payments in the U.K. – initially launched in 2007 – has propelled the spending limit on contactless cards to £30 starting in September of 2015. One of the reasons to limit the amount of purchase is because banks and stores are still worried about the dangers of fraud.

Apple even addresses the possibility in its FAQ. An ACI study published this week explores omni-channel fraud management and explains how the retail industry in both the U.S. and Europe is ill-prepared for the inevitable increase of fraud attempts. As more consumers engage with retailers through multiple channels — with an ever-increasing range of payment methods and devices — retailers are faced with added challenges, including heightened exposure to fraud risk and increased complexity of fraud management.
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