The big question about Apple Pay is not if, but when, the larger Irish banks will get on board.
Apple Pay launched in Ireland this week but the biggest banks – AIB and Bank of Ireland – were conspicuous in their absence.
If there was one tech launch this year that this writer had been eagerly anticipating, it was that of Apple Pay. Yes, as a self-confessed Apple fanboy, I was looking forward to the day where I could pay for goods at the counter with an iPhone or an Apple Watch. I was particularly looking forward to the perplexed expressions on the faces of counter staff at this new-fangled innovation.
‘There is no doubt that there would be a desire on Apple’s part to get distribution as far and wide as possible’
– JASON LALOR
Apple Pay can be used anywhere that contactless payments are accepted, including retailers such as Lidl, Aldi, Boots, SuperValu, Centra, An Post, Burger King, Compu b, Dunnes Stores, Harvey Norman, Elverys, Applegreen and Marks and Spencer, to name a few.
Each transaction is validated either through Touch ID or a passcode at the terminal. Online shopping in apps and on websites accepting Apple Pay is as simple as the touch of a finger.
In particular, I was looking forward to the ease with which I could sync my debit card with my phone.
In fairness, Android Pay was first out of the blocks in December with AIB and KBC Bank, and it is a very similar model – but my heart was set on Apple Pay.
Already a big fan of Wallet on the iPhone for things such as airline tickets, I knew in my heart of hearts that my banking cards belonged in the deck, too.
But when Apple Pay finally launched in Ireland this week, only three years after it was first unveiled at the iPhone 6 launch in September 2014, it was with just two banks: KBC Bank and Ulster Bank. It also incorporated a fintech app called Boon that lets you move cash from your cards into a virtual container.
This means that broad swathes of the iPhone-toting population of Ireland are still without access to Apple Pay; unless, of course, they wish to use Boon, which looks like a pretty handy tool.
Kudos, in particular, to KBC Bank, which managed to launch both Android Pay and Apple Pay compatibility with apparent aplomb.
So what do the main banks have to say? Not a lot, but the fact is that it is only a matter of time before they launch Apple Pay.
Bank of Ireland had this to say: “With 8m customer interactions every month on our mobile app – and 14m monthly interactions across mobile and tablet apps, online and our contact centres – the way in which our customers bank is diverse. With that in mind, we keep all new technology platforms under active review, including Android and Apple Pay technology.”
AIB was equally circumspect in its reply to my question: “We are in discussion with a number of payment service providers, including Apple, on bringing innovation in payments into Ireland following our recent deployment of Android Pay. We are not in a position to confirm timing of such payment development at this time.”
Fair enough, but do please hurry up.
Will Apple Pay be a game-changer?
For a country that historically has had a fatal attraction to cash and cheques (there is a graveyard full of businesses somewhere that waited on the refrain, ‘the cheque is in the post’), Ireland is swiftly getting in sync with the mobile payments revolution.
Chip and PIN, and contactless cards have been rapidly assimilated by the population and it is likely that the mobile wallet trend will too, albeit perhaps at a slightly slower pace.
According to recent research from Visa, 54pc of European consumers regularly use a mobile device to make payments.
Recent research from PwC revealed that Irish consumers are relying on their smartphones as shopping tools and 30pc say their mobile will be their main shopping tool going forward.
This all bodes well for mobile wallets as a way of keeping organised. I pointed out earlier this week that Irish retailers can make a shortcut around their e-commerce roadblocks by going mobile-first.
The role of Apple Wallet and Android Wallet in this retail transformation cannot be underestimated. But the lynchpin of this will be all the banks, not just a few, taking part.
Dublin is home to card giant MasterCard’s global R&D operation, where more than 300 researchers are at the epicentre of tech development for the company.
Country manager Jason Lalor agreed with my assertion that it is matter of ‘when’, not ‘if’, for the main banks.
“We support any of the issuing banks by ensuring their platform is set up. But it is really down to the banks themselves, and I’m sure the conversations are ongoing and … tend to be commercially based.
“There is no doubt that there would be a desire on Apple’s part to get distribution as far and wide as possible.”
Security is a key aspect of Apple Pay. When you use a credit or debit card with this service, the actual card numbers are not stored on the device, nor on Apple servers. Instead, a unique device account number is assigned, encrypted and securely stored in the Secure Element on your device.
Card issuers such as MasterCard and Visa provide the gateways to enable mobile payments via contactless cards and mobile wallets.
For example, MasterCard Digital Enablement Service is a secure payment system that has been built with ‘EMV-like cryptography’ to enable its cardholders to use Apple Pay, and ensure that transactions can take full advantage of the most advanced payment security in the world.
“The key here is that each time a payment is made, the transaction is ‘tokenised’ and given an anonymous identity,” Lalor explained.
Lalor believes that based on the take-up of Apple Pay elsewhere, adoption will be pretty swift.
“Since Android Pay launched in December, uptake in Ireland has been at a healthy pace and the numbers are increasing by the week.
“We get the sense that with Apple Pay, the numbers are going to be pretty similar. The key is the places where payments this way can be accepted.
“Contactless was the first behaviour of ‘tapping’ and in Ireland in the past year, contactless payment volumes increased 500pc.
“With the number of payments starting to increase in contactless, we believe that Apple could be a game-changer in encouraging this step change in behaviour.”
So, if the future is ‘tap and go’, all eyes are on Ireland’s main banks to enable Apple Pay.