BankTech

Apple Pay Poised to Enter UK Market in 2015 despite Concerns by Banks

MEDICI

We had earlier reported about Apple looking forward to expanding its mobile payments service Apple Pay to countries in Europe, Middle East, India and Africa. A job listing by Apple had revealed that the company is forming a new team, focused on Apple Pay, at its London office. It has recently come to light that Apple is in talks with banks in UK to launch Apple Pay in the first half of 2015. Apple is certainly following the ‘partnership’ approach as it did for the US launch. Apple has already had successful partnerships with 30+ banks in US for Apple Pay.

However, as reported by The Telegraph, negotiations between Apple and at least one of the biggest banks may not be that smooth as expected. This is due to concerns over the terms as to what data Apple will be able to access. The bank, in question, is uncomfortable with the amount of personal and financial information Apple wants to collect about its customers. Some executives even fear this as an invasive strategy against the banking industry.

Besides these concerns, all major banks in UK are expected to willing accept Apple Pay given its significant adoption and popularity amongst banks in US. There should not be any security concerns for banks as Apple Pay uses a host of features like tokenization, NFC and Touch ID to authenticate payments. Banks in UK would not want to miss out on the opportunity that Apple Pay can bring. As per a report by McKinsey, payments account for 80% of interactions between banks and customers. Apple Pay can be an ideal platform for banks to cross-sell other financial services.

UK already has an infrastructure in place that could Apple Pay gain traction at a rapid pace. UK is home to 350,000 contactless point-of-sale terminals. The consumers are quite oriented towards contactless payments as well. For every compliant terminal in UK, there are 200 contactless payment cards in use. Judging be these numbers, Apple Pay can get an ideal share of the pie in its early phase there, in terms of transaction volumes.

Regarding the official launch in UK, there are no updates on exact dates but with ongoing partnership deals and the infrastructure already present to deploy Apple Pay, it’s possible that we might end up seeing Apple Pay in UK at end of 1st quarter of 2015.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI team who collaborate to create FinTech insights.

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