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Apple Pay’s launch in Britain advances mobile payments in mature market

MyCheck is one of many businesses embracing Apple Pay in Britain, where the convenience of one-step checkout, thanks to the Touch ID button, is likely to overrule any consumer hesitation and present a challenge to local competitors.

MyCheck’s restaurant clients will now allow guests to check out via their smartphones, as well as split the bill or redeem offers with Apple Pay’s functionality. This move marks the first time that the iOS solution is being rolled out to restaurant-goers in Britain, and will likely find a receptive audience on the heels of Apple Pay’s growing adoption among United States-based merchants and consumers.

“I have no doubt that consumers in the UK will embrace Apple Pay,” said Emma Crowe, chief of client strategy at Somo, London. “The UK is a far more mature payments market than the U.S., which will help fuel use of Apple Pay in the new market.

“Therefore, Apple is entering a market that’s ripe for Apple Pay adoption,” she said. “While Apple isn’t first to market, it is first to enable UK consumers to pay via their mobile (without the need for a sticker) through contactless terminals.

“As we’ve seen time and again, it takes Apple entering a market to produce a real, fluid, customer experience. Apple has the industry and consumer clout, the trust, reach and the right consumer base to make mobile payments a success.”

Expanding outreach
Apple Pay’s expansion suggests that its acceptance in the U.S. market has been relatively successful, and points to the growing omnipresence of mobile platforms as a payment alternative to cash or credit cards.

British consumers can now authorize a transaction via a restaurant’s iPhone app or through one of MyCheck’s partner apps with the tap of a finger on Apple’s Touch ID button. Users can also opt to split the check with friends or family when dining out, a useful feature that will likely resonate well with the public.

Paying via Apple Pay offers diners the luxury of not waiting for their server to bring them the bill, making the entire outing adaptable to their schedules. Additionally, iPhone owners will be able to redeem offers and also participate in loyalty programs when iOS 9 is released this fall.

“Apple Pay’s launch is certainly good news for the UK, taking the country to the era of digital payments using the NFC technology,” said Pinar Ozcan, assistant professor of strategic management at Warwick Business School, London. “What has always been a struggle is for Apple Pay and the competitors to build a large enough ecosystem of merchants and bank partners in order to enable immediate adoption.

“While it is not clear why HSBC has decided not to support Apple Pay’s UK launch, it certainly rings alarm bells as consumers often have a ‘now or never’ approach to new technologies, easily deciding not to adopt for a long time if it is cumbersome to do so at the beginning.”

Benefits for restauranteurs
Restaurants who choose to accept Apple Pay via MyCheck’s platform will experience a plethora of benefits. Servers will no longer need to spend time inputting billing information or filling out forms, as guests will be able to send all of that content virtually via their smartphones.

Security is also a top feature. Credit cards that are added to Apple Pay will receive a unique device account number to encrypt data, while transactions will receive a one-time dynamic code.

Additionally, new hardware will not need to be purchased, as Apple Pay works seamlessly within the point-of-sale system and app.

“The launch of Apple Pay (and Android Pay) is indicative of changes in consumer behavior and the market as a whole,” Somo’s Ms. Crowe said. “Consumers want to digitize their entire wallet by storing it on the cloud and on their mobile devices.

“Ultimately, we expect mobile payments to become a two horse race – Apple Pay versus Android Pay,” she said. “There has been much talk from operators over the last decade about mobile payments, but no real, workable solutions.

“It will come down to which device you use – iOS or Android. You can bet that with Apple Pay’s launch, Android won’t be far behind.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York