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James Martin/CNET
Apple Pay could reach beyond the shores of the US as early as this summer.
At its Worldwide Developers Conference, which starts Monday, Apple may announce the upcoming debut of Apple Pay in the United Kingdom, the UK-based Telegraph has reported. Citing unnamed industry sources, the news site said the service will roll out there sometime in the next two months. Much of the technology needed for Apple Pay to work in the UK is already in place, according to the Telegraph, as retailers have invested in the necessary contactless debit- and credit-card payment systems.
Apple Pay launched in the US in October as Apple’s first venture into contactless mobile payments. Using an iPhone 6, iPhone 6 Plus or Apple Watch, you can pay for items on the go at supported retailers via NFC (near-field communication) technology. Apple has been drumming up support for Apple Pay among more and more banks and retailers in the US, but to truly gain a foothold on the market, Apple Pay needs to expand globally, especially as such rivals services as Google’s Android Pay and Samsung Pay start to ramp up.
Expanding Apple Pay globally is more of a challenge than it may sound. Reports have surfaced that Apple has also been chatting with banking and financial firms in China and Canada about supporting the payments system. However, there are obstacles.
Apple gets a 0.15 percent cut of the 2 percent fee paid by retail merchants for each credit card payment and half a penny for each debit card payment conducted through Apple Pay. But Chinese banks don’t want to give that percentage to Apple, an employee of one large bank told MarketWatch in April. Apple CEO Tim Cook said in May that he was “very bullish on Apple Pay in China” but revealed no details as to how negotiations were proceeding.
The situation is also dicey in Canada where banks are balking at the financial terms involved in supporting Apple Pay, the Wall Street Journal said in April. Though Apple has reportedly been talking with several Canadian banks about a possible Apple Pay rollout in November, the banks themselves would have to kick in transaction fees that they consider too high, one source said.
Another challenge may have surfaced in the UK as well.
In December, the Telegraph reported that Apple had been been speaking with top British banks about adopting Apple Pay. But at least one bank was purportedly concerned about the access that Apple would gain to the personal and financial information of its customers. However, that concern may have been addressed since then, assuming Apple Pay truly is set to hit the UK in another couple of months.
Even in the US, though, Apple Pay is struggling to become more ubiquitous. All of the major credit cards and many of the major banks support it. But the retail side is another story. Apple continues to sign up more major retailers, but many still hesitate to jump onboard.
In a poll of the National Retail Federation’s list of the top 100 U.S. retail chains, Reuters reported last week, less than a quarter said they accept Apple Pay and almost two-thirds said categorically they would not accept it this year. Only four chains said they plan to add support for Apple Pay in the next year.
The reasons?
Retailers cited such factors as a lack of sufficient customer demand for Apple Pay, the inability to access the customer data collected in Apple Pay transactions and the cost in implementing the necessary technology. Some chains said they were bypassing Apple Pay in order to join CurrentC, a rival mobile wallet system supported by a coalition of retailers known as the Merchant Customer Exchange. Led by Wal-Mart and other top chains, CurrentC is scheduled to roll out sometime later this year.
Regardless of Reuters’ report, Apple Pay has found a footing. As of March, it worked at more than 700,000 sites, including retail outlets, vending machines and parking meters.
Apple did not immediately respond to CNET’s request for comment.
