Apple Pay: A great leap forward in the mobile payments revolution

By Jeremy Nicholds, Former Executive Director • Visa Europe

July 14, 2015

Today, Apple Pay officially arrives on UK shores. This is a major moment , not just because people in the UK can now buy their morning latte on their Visa card at the touch of an iPhone, but because of what this launch means for mobile payments more broadly.

See also www.visaeurope.com/applepay/ for product details, an extensive Q&A, and resources for media – For more information click here

Mobile contactless payments are already available through companies like Vodafone with Visa SmartPass and via a number of banks offering Visa cloud-based payment apps using Android HCE technology. However, the Apple Pay launch is still a huge step forward for mobile payments, and with contactless adoption rates already so high in the UK, the market is ready for it. We’ve invested heavily to ensure that there’s a mature, mobile-ready payments infrastructure in place and ready to accept services like Apple Pay, and with 410,000 contactless terminals installed in the UK – and 2.6 million across Europe – consumers and retailers are seeing the benefit.

The UK is poised for a surge for mobile payments

Earlier this month we announced another major milestone for contactless payments: Across Europe, Visa cardholders made more than 1 billion contactless purchases in the last 12 months, with over €330 million spent via contactless payments in March alone. Interestingly, British consumers have led the way in this, accounting for a third of all contactless transactions. That habit-forming behaviour gives Apple Pay another boost as contactless is already a familiar way to pay for many people.

I’ve been using my mobile for payments for at least a year now and usually make seven or eight transactions a day – I’m well and truly hooked. Thinking back to my days running consumer cards at NatWest, we classified heavy cards users as those who made more than ten transactions a month. We’re now talking hundreds of transactions a month – all generating additional revenues for banks and all the time adding to the rich customer view banks now have about our lifestyle and shopping habits.

And it’s not just banks who benefit: There’s also considerable benefit for the retailer in taking friction out of the consumer experience and lowering overall costs by replacing expensive cash and coin with contactless. Our recent Mobile Money research found almost half of UK consumers want to pay via contactless using their mobile phone. This isn’t just about buying the lunchtime sandwich, either. It’s about paying for transport using mobile contactless at a wide variety of shops, bars and restaurants. We also found that iPhone users are hungrier for this type of tap-and-pay convenience than their Android peers, which bodes well for the Apple Pay launch.

Today’s launch is a pivotal moment for mobile payments – Evidence of a seismic shift in how we shop, spend, buy and sell, and of a fundamental movement from traditional plastic to digital.

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