U.K. Banks Eye Apple Pay, But Some Fear a Worm (Jan. 6, 2015)
Several major British banks reportedly are in negotiations with Apple to bring the tech giant’s Apple Pay service to the U.K. before the midway point of this year. The country’s top financial institutions are enthused by the contactless payment platform’s strong showing thus far in the U.S.—but do have concerns over security and competition, according to a report in The Telegraph.
Citing sources close to the negotiations, the report said talks with at least one major bank have “proved tricky” due to wrangling over what types of customer and personal information Apple will be able to access. Apple has repeatedly said it will not use Apple Pay to collect user data, instead serving only as a conduit between customers, merchants and banks. But financial institutions could be wary of Apple encroaching onto their turf; the Telegraph report said some bank executives feared Apple Pay could serve as a “beachhead for an invasion of the banking industry.”
An August report from McKinsey & Co. noted that payments comprise more than 80 percent of customers’ interaction with their banks—making payments a critical platform for customer engagement and cross-selling. The McKinsey report warned banks of increasing competition from nonbank players—including tech providers and telecoms—looking to make inroads into payments.
Since its launch in the U.S. last fall, Apple Pay has gained significant traction. During November, Apple Pay’s first full month of operation, the service accounted for 1 percent of all digital payments, according to a recent report by ITG. That rate was especially impressive, noted the report, considering Apple Pay currently only is available to consumers with the latest hardware and is still only accepted at relatively few merchants. Apple continues to add merchant partners, however. Last week, fuel chain Chevron announced plans to enable Apple Pay acceptance at its gas pumps.
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