Apple Pay comes to the UK – at last!

Apple Pay NatWestAs everyone now knows, Apple Pay launches in the UK in July. If you have a card from a participating issuer and an iPhone 6, 6 Plus or Apple Watch (paired with an iPhone 5, 5C, 5S, 6 or 6 Plus) you can pay in store at contactless card terminals. In app you can pay using an iPhone 6 or 6 Plus or iPad Air 2 or Mini 3. So far my experience of using my Apple Watch to pay in store has been limited to Starbucks (using the Starbucks app) so I’m very excited about using it in lots more stores!iPhone6_Watch_iOS9_Wallet_NatWest-PRINTiPhone6_Watch_iOS9_Wallet_NatWest-PRINTiPhone6_Watch_iOS9_Wallet_NatWest-PRINT

Apple has clearly done a good job getting a critical mass of card issuers on board at launch with most of the major issuers committed, either at the start or soon after. At launch American Express, First Direct, HSBC, Nationwide, NatWest, Royal Bank of Scotland, Santander, Ulster Bank cards will be supported. Bank of Scotland, Halifax, Lloyds Bank, M&S Bank, MBNA, TSB will follow.

Apple Pay AmexObvious omissions are Barclays and Capital One. Whilst Barclays has its own strategy around Pingit and also contactless wristbands, it is still a curious decision not to sign up at the start and one that will annoy many customers. Both Barclaycard and Capital One in the U.S. support Apple Pay which just goes to show how fragmented banks and payments markets are!

There are around 400,000 places that support contactless payments in the UK. It appears that most of these will limit Apple Pay transactions to the usual £20 contactless transaction limit (£30 from September), despite the superior authentication offered by Touch ID. However some retailers will not be bound by the limit, as in the U.S. I suspect that some contactless terminals will not support Apple Pay, especially early generation models. Currently neither my American Express nor Capital One cards work for contactless payments via any Caffe Nero terminal I’ve tried (Chip and PIN is fine and contactless elsewhere works). These terminals are old and seem to be incompatible with newer contactless cards.

Apple Pay HSBCApple has a handy summary of the key places where you can use Apple Pay, both contactless and in app Apple Pay stores.

Whilst Apple Pay is not truly disruptive because it uses the existing card scheme payment rails, it moves consumers along the journey of mobile device payment acceptance whilst improving transaction security. For consumers, frictionless payments moves a step closer.

Friction and frustration … Barclays Pingit and their problem with identity verification

Last year I wrote about my experiences with Barclays Pingit and how the digital proposition falls apart when your handset changes. Well it’s happened again but even worse …

I’ve been a long time fan of Pingit because it’s a well designed app that provides useful person-to-person payments functionality, even for non Barclays customers. Plus it now supports Paym mobile phone number based payments which is great for customers whose main bank doesn’t yet offer Paym.

Barclays PingitHowever when things go wrong you realise that although it’s a great app, it’s been bolted onto aging, dysfunctional banking processes and systems. A few days ago my iPhone was replaced by Apple and I duly restored my encrypted backup which preserved all my passwords. My NatWest app continued to work fine, my Capital One app continued to work fine. However Pingit needed to be setup again as the device had changed. Sounds like good security, locking the app to my device, however the only way to now cancel and re-setup the app was to call Barclays – annoying and low tech but if that’s what it takes … This I duly did and my registration was cancelled. I re-registered via the app, completed the micro deposit verification and was then presented with a screen telling me my address couldn’t be verified so I needed to visit a Barclays branch with photo ID and proof of address.

My address was fine the day before; had I been wiped from every electronic database by an electromagnetic pulse? Or maybe the Barclays creaking systems infrastructure couldn’t handle some simple electronic verification checks? I called the Pingit customer service line again but the agent was unable to tell my why I had to have my address verified by a branch. Proof of address could be paper utility bill or bank statement less than three months old and not printed from the Internet! Who still has these? Fortunately I managed to find a council tax bill that was just under three months old – not sure what would have happened if I hadn’t got this one.

I duly visited a Barclays branch where a very helpful lady photocopied my documents, updated the account system and then spent 20 minutes on the phone to a Barclays call centre somewhere getting my Pingit account re-enabled. Yes, 20 minutes to switch me back on!

Pingit should be a hook to persuade customers to move their banking to Barclays but this experience means I could never contemplate using them as my primary bank. The idea that to sign up for a digital app you have to visit a branch is bizarre. There are smart ways to verify identity and address against electronic datasets and I’d be happy to share them with Barclays but for now customers are stuck with friction and frustration; and Barclays is stuck with processes that cost them a fortune.