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Contactless payment solutions are forging ahead as the United Kingdom becomes the second nation worldwide in which Apple Inc. (NASDAQ:AAPL) has launched Apple Pay with a transaction limit of £20.
The contactless payment system was released initially to customers in the United States only, and has now made its way across the Atlantic, making use of the Near Field Communication (NFC) antenna built into the iPhone 6.
In terms of functionality, to make a payment, users simply need to hold their iPhone near the contactless reader at the point of sale, and place their finger on Touch ID. There is no need to look at the screen to see whether a payment information was successfully sent, as a subtle vibration and beep confirms the transaction.
Large financial institutions in the UK have been quick off the mark to support contactless payment systems, with Barclays being one of the first to show its interest via its own proprietary system.
Indeed, Barclays may simply want to entice customers away from Apple Pay in order to attract them towards the Bank’s own bPay mobile payment service. This service works using a sticker that can be placed on the back of a phone, or through a keyfob, or even a wristband.
The difference is that Apple Pay is fully integrated into one device, therefore it is unlikely that Barclays customers will gravitate toward the bPay system instead as it offers no extra security (Apple Pay has the Touch ID fingerprint sensor), and that means if the sticker, wristband or keyfob disconnects itself from the device and goes missing, anyone can use it for transactions up to £20.
HSBC had plans to support Apple Pay from the end of July, however at the time of Apple Pay’s UK launch today, HSBC had, according to a report by the BBC, plans to offer Apple Pay support “in the future”, relying for the moment on its own proprietary payment system.
Five other banks, Bank of Scotland, Halifax, Lloyds, TSB and Marks and Spencer will launch in the autumn.
HSBC denied that its decision not to participate at launch was last minute, saying that it had not planned to take part.
However, the bank was listed on the Apple website as a participant as late as Monday. An HSBC spokesperson told the BBC: “We are now working hard to bring this to our customers by the end of July.”
The Apple Pay system is compatible with all Apple devices including Apple Watch, however only the iPhone 6, iPhone 6 Plus and Watch contain near-field communication (NFC) chips, which are required to make contactless payments.
The he iPad Air 2 and iPad Mini 3 are the firm’s only tablets fitted with fingerprint readers, which are needed for online sales.
In opposition to the recalcitrance displayed by Barclays and HSBC, merchant services providers have been very quick to take up support for Apple Pay. Visa, Mastercard and American Express have all signed up, and the initial wave of banks and building societies includes Ulster Bank, Nationwide, NatWest, Santander and the Royal Bank of Scotland.