Apple Pay UK: the successful launch and what it means for marketers
Since Apple Pay launched in the UK last week it has had a spectacular take up as iPhone and Apple Watch owners embrace the ease of contactless payment using their device.
The payment app has been most used on London’s public transport system, making Transport for London the most popular retailer on Apple Pay since the UK launch. According to Brandwatch, four times as many people used Apple Pay for a TfL journey than for purchases in Tescos. Other top retailers include Pret A Manger, Boots, Starbucks and Waitrose.
Since TfL introduced contactless payment as an alternative to swiping in and out with Oyster cards on London’s buses, underground and overground trains, it has been a popular method of payment. At the beginning of this year, 30 million people paid for travel on contactless, making up 12% of pay-as-you-go-journeys.
It is not surprising then that so many people have already made the switch to pay by tapping in and out with their iPhone or Apple Watch rather than a contactless credit or debit card.
While the UK is already the leading country in Europe for using contactless payment, a recent report by Visa found that mobile payments in the UK are set to boom, with six in ten Britons using their mobile devices for payment by 2020.
UK retailers have given their support to the introduction of Apple Pay with the likes of The Post Office, Costa and Wagamama being announced as partners for the launch as they look to improve their in-store customer experience.
But what does this mean for marketers?
When Apple Pay launched in the US, mobile marketing company Vibes saw a 54% increase in people installing coupons or loyalty cards into Passbook from September to October. Vibes CEO Jack Philbin told Business Insider he attributed this increase to the introduction of Apple Pay.
"The marketing is done through Passbook… Apple Pay is just the payment functionality,” said Philbin. "Nothing is more powerful that having your brand alongside someone’s credit card in your wallet."
If people are using their phones to make payments, then they are more likely to pay attention to notifications on their phone that can give them offers or money off when making purchases.
Thanks to location services and iBeacon technology, push offers and notifications for Passbook can appear when your phone detects that you are in or near one of its stores.
A report from Forrester actually indicates that 57% of US smartphone users are interested in using mobile payments in order to receive special offers and loyalty points. Reward schemes are the most popular reason for using phones as payment over contactless cards.
Starbucks is already taking advantage of mobile payment marketing as it lets you store your Starbucks loyalty card on Passbook. It will then appear on your lock screen when you’re in-store, prompting you to collect points and reap the rewards.
Apple already has its plethora of launch partners, but as more retailers realise the marketing potential of Apple Pay, there may be more opportunities for partnerships and contra deals.
The Forrester report states that, “In 2015, 27% of marketers and digital business executives plan to start using mobile wallets to engage with their customers.”
As well as marketers taking up the opportunities Apple Pay presents, payment technology companies should also look to support the system. Adyen was among the first to enable Apple Pay for its US customers and is ready to integrate the device payment in the UK.
“One of the key benefits of accepting Apple Pay with Adyen is the ability to operate in both the US and UK and manage online and in-store Apple Pay transactions with a single partner. This also means businesses can access detailed transaction data and reporting from just one interface,” says Adyen.
As mobile payment and mobile wallets take off over the next few years, marketers and payment companies need to take advantage of this opportunity to directly appeal to customers through their phones by literally putting offers in their hands.