Apple Pay has arrived in the UK. I saw Pete Markey, the Chief Marketing Officer of the UK Post Office proudly demonstrating his Apple Watch on LinkedIn earlier this week – presumably paying for something by tapping his watch on a post officer counter. This is a giant leap forward and shows how traditional brands are embracing new technology to keep ahead and give their customers the experiences they demand. My bank, NatWest, has recently emailed me to let me know about my new wallet and to encourage me to sync it for use.
The system works for small payments up to £20 and requires an iPhone 6 or 6 Plus or Apple Watch. The user can just tap their device on a payment terminal to make an instant payment – just like a contactless card.
The Apple system has been live in America since October last year and the UK market is the first to come online outside the US. Most banks, and credit card issuers have lined up to support the system so most British iPhone users will find that any retailer with an existing contactless payment system will be ready to take their Apple payment from today. Not all banks were ready in time and organisations like HSBC missed the launch date – I wonder if their customers noticed this too and if it had an impact?
It’s an important development for Apple to choose the UK as their second launch market. The UK is seeing a wave of financial innovation taking place with many new brands entering the market for products such as savings, investments, loans, and even basic retail banking.
I mentioned some of this in my last blog here. Brands like Renault are entering the UK financial services market even though they are naturally thought of as being a leader in a completely different market. The arrival of Apple Pay just underlines the point I was previously making. But there will be two real ingredients necessary for success in this new world of financial products and service providers – the power of your brand and your expertise in delivering first rate customer service.
Apple has great experience in both these areas so the future looks bright for Apple Pay, but as the major banks plan their own strategic paths for the years ahead, they need to consider just how much the market has changed. Only a few years ago, nobody could have considered that a ‘tech’ firm would be launching a new nationwide payment system in the UK. With initiatives like Bitcoin, M-Pesa and peer to peer lending (Funding Circle, Zopa) and currency exchange (www.moneyswap.com) which has cut out the traditional role of banking institutions, the change is now a reality.
It’s been hard to quantify just how successful Apple Pay will be but we know they took 2% of the US market within the first 6 weeks and there will be an expectation to do the same in the UK between now and the end of August.
As it becomes easier for companies to carve out their own niche area within the broader financial services market what are the existing players doing to ensure that their brands remain valued and their service levels meet what customers expect in 2015? We’ve been here before with utilities companies in the 1990s and ISPs in the 2000s, what is common to the success of all is ultimately the winning customer experience that the best brands deliver. So it will be with Apple Pay and every new ground breaking financial service innovation and bespoke provider.
Photo by Beverley Goodwin licensed under Creative Commons.