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How to: Use and set up Apple Pay

As Apple launches its Apple Pay contactless payment system in the UK, with retailers including New Look, Marks & Spencer, Dune, JD Sports and Liberty already signed up, Drapers looks at what you need to know to take advantage of the new system.

Who will use it?

Apple Pay

Apple Pay

Apple Pay will be available in the UK across the iPhone 6 and Apple Watch for online and in-store payments and both the iPad Air 2 and iPad mini 3 for payments through apps.

In the US, uptake has already been strong following its launch in October, with more than 40% of iPhone 6 owners having used it at least once. In January, Apple reported that its new payment system took more than $2 of every $3 spent using contactless payment across the three major US card networks.

Here in the UK, Apple Pay will be supported by more than 70% of the credit and debit cards, with banks including HSBC, NatWest, Santander, TSB, Lloyds, Nationwide and Royal Bank of Scotland signed up. The UK is the first country outside the US to have access to Apple Pay, with more than 250,000 retail locations to launch the technology next month, and it is expected to be introduced in China later this year.

Laura Wade-Gery, executive director of multichannel at M&S, says Apple Pay will provide shoppers with “an even quicker, easier and more convenient way to shop”, while Dune Group’s chief operating officer James Cox is confident it “will prove popular due to the speed and security” it can provide to the contactless payment process, helping to reduce till queues.

Contactless card payments are already popular here, and Jeremy Nicholds, executive director of mobile at Visa Europe, believes “the simplicity and convenience of Apple Pay will catapult mobile payments into the mainstream – if people leave the house with one item, it’s their mobile phone”.

In the UK, contactless spend represented £2.32bn of sales last year, according to the UK Cards Association, and the Centre for Economic and Business Research believes 20 million adults will use their mobiles to pay for goods and services by the end of the decade, with the value of purchases tripling from current levels to £14.2bn in 2018.

An early prediction from payment provider Sage Pay is that one in four businesses will consider using Apple Pay.

How does Apple Pay work?

NFC (near-field communication) chips in an iPhone or Apple Watch connect to a contactless card reader located at a till point. To complete the transaction the device is held in front of the reader while the shopper holds their finger on the phone or watch’s ‘Touch ID’ fingerprint reader. The device will then beep or vibrate to signal that the payment has been made. The same process is used for online payments.

Extra security is provided for those using Apple Pay as no card details are stored on devices or passed to the retailer. Instead a unique, one-use token is created for each transaction.

Rik Blacow, senior product and innovation manager at payment provider Sage Pay, adds: “The obvious attraction to Apple Pay is its biometric security value. Apple Pay carries no more risk than mobile banking.”

Apple Pay is also integrated as part of the tech firm’s IoS 9 platform, creating a digital wallet and enabling consumers to keep payment cards, loyalty programme memberships and e-receipts in one place.

Dipak Raval, a commercial director at technology consultancy Cambridge Consultants, says this enables retailers “to create a more omnichannel relationship with customers”.

Conlumino consultant David Alexander believes the payment system will also speed up online purchases, reducing basket abandonment by reducing the security information and clicks required. “One of the bugbears consumers have with online shopping is the payment process is quite a hassle, so this reduces time spent online and has the potential to reduce risk of abandoned baskets.”

How do retailers get involved?

For most retailers with modern point-of-sale (POS) systems, Apple Pay can be added to the list of payment options by simply approaching their payment provider to enable it. Contactless payment readers will also need to be installed, but Apple Pay works across existing readers already being used in many stores.

Payments made using Apple Pay are subject to the same transaction fees as card payments for retailers, and Apple is then reportedly taking 0.15% of the transaction from the banks for credit card transactions and half a cent in the US (the UK fee is still to be confirmed) for each debit card purchase.

While UK contactless payments currently have a value cap of £20 (rising to £30 in the autumn) to protect against fraud, some retailers offering Apple Pay will be able to talk to payment providers to waive this as the system’s fingerprint scanner adds greater security.

Sage Pay’s Rik Blacow says: “All new payment methods, including Apple Pay, are and will be defined by approved industry standards, so there’s no need to fear them. NFC, the technology behind both contactless and Apple Pay, can be used in conjunction with most of the latest card payment terminals in the market, so you won’t require new and expensive technology.

“All retailers who want to offer their customers a frictionless and modern payments experience ought to be embracing Apple Pay.”

Other key payment developments to watch

Dipak Raval of Cambridge Consultants advises retailers to keep an eye more generally on contactless payment developments this year to ensure they stay up to date as the area is undergoing rapid change, with rival systems like Android Pay, Samsung Pay and Zapp being prepped for launch.

Google announced its Android Pay system earlier this month, which also uses NFC technology. It is expected to be launched in the US later this year, but it is not yet known when it could reach the UK. The service will also be joined up with loyalty cards, and retailers signed up in the US include American Eagle Outfitters, Bloomingdale’s and Aeropostale.

Samsung Pay uses NFC and a new MST (Magnetic Secure Transmission) technology to facilitate payments using Samsung Galaxy S6 or Galaxy S6 Edge.

MST makes Samsung Pay compatible with the checkout terminals that support NFC or the traditional magstripe found on debit and credit cards. Samsung has said this means the service could be accepted at 30 million merchant locations worldwide. There is no word yet on a precise launch date, but the tech firm is expected to release it later this year.

Pay by banking app system Zapp will be launched in the UK in September, enabling retailers to take instant payments from shoppers’ banking apps – both in-store and online – helping to speed up cash flows. Retailers including House of Fraser, Clarks, Dune, Bravissimo and Shop Direct have already signed up.

To watch a video of Apple Pay in use go to


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