Friday 26 May 2017

Goodbye to cards and cash as new Apple Pay swipe system launches

Apple Pay has finally arrived in Ireland, with Ulster Bank and KBC leading the way as major retailers sign up to the mobile payment service that has been a global hit. Our technology editor tries out the contactless system on an Apple Watch and looks at its features

Adrian Weckler tries out Apple Pay to buy coffee at a shop in Dublin city centre
Adrian Weckler tries out Apple Pay to buy coffee at a shop in Dublin city centre
Adrian Weckler

Adrian Weckler

It's been a while coming. But this week, Apple Pay finally went live in Ireland.

In thousands of locations across the country, you can now swipe your phone or Apple Watch against a contactless terminal to pay for something.

Launch partners using the system include supermarkets such as SuperValu, Dunnes Stores, Lidl, Aldi, Centra and Marks & Spencers. Other retails chains such as Insomnia, Boots and Harvey Norman also accept the payment system as do petrol stations such as Applegreen and Amber Oil.

But Apple Pay is designed to work almost anywhere that ordinary contactless credit and debit cards work.

The system works by incorporating Mastercard or Visa contactless debit and credit cards. It can also be used shopping online or within apps.

Apple Pay can be used by anyone with an iPhone 6, iPhone 7 or iPhone SE. It can also be used with newer iPad models, MacBooks after 2012 and all Apple Watches.

The purchasing limits for Apple Pay are identical to those of contactless Visa and Mastercard cards. Per-transaction limits vary according to individual retailers. There will be no additional charge to using the phone as a payment method.

Transactions using iPhones are validated by using a fingerprint or a pin code.

However, the payment system is limited at launch to cards issued by Ulster Bank and KBC bank.

"We ultimately want to bring Apple Pay to as many users in Ireland as possible," said Jennifer Bailey, the Apple vice president in charge of Apple Pay. "But even if your primary bank isn't involved today with Apple Pay, you can still use Apple Pay with Boon prepay."

Boon is a prepay system that works by downloading an app and topping up via a prepaid digital Mastercard. It works in any shop whose terminals accept the Mastercard contactless logo. Payment transactions with Boon need to be authorised with a pin code.

A spokeswoman for AIB said that the bank is "in discussion with a number of payment service providers, including Apple" but that the bank is "not in a position to confirm timing of such payment development at this time".

The introduction of Apple Pay means that almost all Irish smartphone users can now use their handsets as payment cards. In December, Google launched Android Pay in Ireland with Mastercard or Visa contactless debit and credit cards issued by AIB or KBC.

Visa, which is the largest contactless card company here, says users of its contactless cards complete over three million transactions per week using the system.

It says that the average Irish purchase value made with a Visa Debit contactless card is now €12.72, indicating a mixture of casual purchases in convenience shops and bigger items in department stores.

Apple says that Apple Pay is safer than using a traditional credit or debit card because each transaction is protected with either Touch ID or a passcode.

It also says that card numbers and identities aren't shared with the retailer or merchant and that the card numbers aren't stored on your device or on Apple's servers.

"Apple doesn't know what you bought, where you bought it or how much you paid for it," said Bailey. "We thought about security from the beginning. So that means that with Apple Pay, your credit card isn't stored on your iPhone or with merchants. It's encrypted on the secure element in your drive. There's a one-time dynamic code that's used each time."

The company says that Apple Pay retains anonymous transaction information "such as approximate purchase amounts". It says that "this information can't be tied back to you and never includes what you're buying".

Adding a card to an iPhone or an iPad is done through the Wallet app on the device. For an Apple Watch, it's done through the Watch app on an iPhone.

For iPhones that are lost or stolen, the card can be disabled through icloud.com/find or by ringing the bank and cancelling the card in the normal way.

Apple also says that products bought using Apple Pay on an iPhone or Watch can be returned, with the balance recredited using the gadgets themselves at the retailer's payment terminal.

KBC's director of innovation, Eddie Dillon, said that there has been a 76pc increase in "mobile usage" among KBC bank customers in the last year.

KBC is the only bank operating in Ireland that has both Apple Pay and Android Pay available to its customers.

"We've got to be doing this," said Dillon. "We're a digital-first bank, we're not opening new bank branches.

"We've been inundated with requests from customers about doing stuff like this. You can expect to see more of this from us."

Ulster Bank director Maeve McMahon described its Apple Pay move as "innovation". "We know from talking to customer that they're excited about this," she said.

Apple Pay's launch in Ireland leaves customers of Bank of Ireland and Permanent TSB out of luck for mobile payments, with neither bank supporting Apple Pay or Android Pay.

A spokeswoman for Bank of Ireland declined to comment. A spokesman for Permanent TSB said that the bank's "focus" is on other things at present.

"We have recently rolled out a major overhaul of our current account offering and that has been our focus over the last few months," said a Permanent TSB spokesman.

"We are exploring options in the mobile pay space over the coming months with a view to deciding the best approach."

Recent figures from the US suggest that Apple Pay is the most widespread mobile payment system used by consumers.

The figures from Boston Retail Partners say that more retailers accept the mobile payment system than any other mobile payment system, including Paypal.

"People in Ireland are used to tap and pay so they'll be very comfortable with Apple Pay," said Apple's Jennifer Bailey.

"The satisfaction rating is as high as 97pc. We know that customers in Ireland will make Apple Pay a part of their routine."

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