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Over half of contactless-enabled terminals now accept Apple Pay transactions of any size, including those at major chains like Sainsbury’s and Waitrose, according to The Telegraph.
In the UK, contactless card transactions are capped at £30 ($39), because of security-related issues.
Apple Pay doesn’t face that limit, because it’s more secure than a traditional contactless payment, but not all terminals were upgraded to distinguish the difference. Now, over half can, which could accelerate Apple Pay’s gains in the UK.
Contactless payments are already at an all-time high in the UK. In February 2017, UK consumers made £3.3 billion ($4.3 billion) in contactless payments, representing 28% of total card payments in the country. That figure is rising fast — the prior February, contactless represented 14% of card payments, and in the same month in 2015, they accounted for 5%. This indicates that the UK is a population that’s attuned to contactless payments.
Higher transaction limits could give Apple Pay an edge over physical cards among this consumer population.
- Higher transaction limits were a major growth driver. In 2015, the UK raised its contactless transaction limit to £30 ($39), a figure that now includes average everyday costs like a basket of groceries. This was a major driver of contactless growth in the market, because it helped encourage habit formation by allowing users to pay via contactless more frequently.
- An unlimited cap could make mobile wallets appealing. Customers that want to “tap-to-pay” could turn to Apple Pay, since it will allow them to do so for any purchase, rather than just those under the limit. This could ultimately magnify the impact of last year’s contactless limit raise, bolstering Apple Pay adoption and volume in the country, and helping to make the UK a key market for the wallet.
Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.
Here are some key takeaways from the report:
- In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
- Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
- Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.
In full, the report:
- Forecasts the growth of US in-store mobile payments volume and users through 2020.
- Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
- Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
- Addresses the key barriers that are preventing mobile in-store payments from taking off.
- Identifies the growth drivers that will ultimately carve a path for mainstream adoption.
To get your copy of this invaluable guide, choose one of these options:
- Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
- Purchase the report and download it immediately from our research store. >> BUY THE REPORT
The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of how mobile payments are rapidly evolving.
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