Not all retailers ready to adopt new Apple Pay system…

22nd June 2015

Next month Apple are due to launch their new Apple Pay contactless payment system in the UK, which works with iPhone 5 and 6 and their new Apple Watch technology. So far Boots, Waitrose, Lidl and M&S have signed up for the system – which was launched in the US last year – but according to Retail Week, many other major retailers are holding back. They remain to be convinced by the new retail technology, which is due to go live in more than 250,000 locations throughout the UK.

Photo by Kaiyu Wu on Unsplash

Photo by Kaiyu Wu on Unsplash

Amongst the cautious are Sainsbury’s supermarket, where Chief Executive Mike Coupe explains that they will ‘wait and see’ before adopting the new tech, as he explained to Retail Week:

“Clearly it’s a fast evolving marketplace and we will adapt as we see fit. We will see how the market plays out over time.”

And Sainsbury’s aren’t the only major supermarket who are hanging back – Co-Op and Tesco are also conspicuous in their absence from the list of Apple Pay retail launch partners.

One concern for retailers which might be holding them back is the fraud element of contactless payment – and how much they can allow to consumers to spend on high-value goods without validating their credentials. At present there is a £20 cap on contactless card payments and this is already proven to be having a knock-on effect on adoption of these types of payments.

Miya Knights, senior research analyst at IDC explained the issue to Retail Week:

“Retailers have told me that the £20 industry cap has held back mass adoption of contactless terminals.”

But some industry experts are postulating that the publicity surrounding Apple Pay might speed up the adoption of contactless payments across the board – both through Apple devices and contactless card payments:

Retailers are now able to choose to accept higher value contactless payments over the £20 limit for card payments and by doing this, they will encourage more contactless sales – however, if the transaction is over £20 then users may have to provide further verification.

Apple Pay differs from standard contactless card payments as its security features already enable additional verification – through fingerprint recognition – and industry pundits believe that this will encourage more widescale adoption of contactless payments for more expensive purchases across the board.

Speaking to Retail Week, Thomas Husson, analyst at Forrester, suggested that more retailers need to get on board in order for Apple Pay to work:

“Apple Pay needs merchants more than merchants need Apple Pay…the jury is still out for merchants.”