Apple Pay is on its way to the UK next month, and from launch, all the big banks except Barclays, and a quarter of a million retail outlets will support it. And yet, despite so many day-one partners, it seems we're not quite ready for it. You see, Apple Pay isn't like any other contactless payment method we use already, since you authorise transactions with a Touch ID fingerprint scan. Contactless debit and credit cards don't require any kind of authentication, which is why transactions are currently limited to a maximum of £20, though the cap is increasing to £30 in September. The whole point of the two-step Apple Pay process is that you can make purchases of any amount using your iPhone, but today we're hearing that the majority of retailers will be bound by the £20 cap at launch.
The thing is, the UK's contactless infrastructure has been built around frictionless, unauthenticated transactions, and right now retailers simply aren't set up to process anything but minor payments. Caps can be hard-coded at the reader level, meaning new devices are needed to handle higher-value payments. While some outlets will have the necessary hardware installed to deal with larger sums by the time Apple Pay launches, many won't or will require a software update, so don't assume your iPhone will be a viable replacement for your wallet straight away.
You can definitely expect that, in time, more retailers will make the move to newer hardware as Apple Pay adoption picks up. And with other mobile players undoubtedly gearing up to follow suit with their own contactless schemes, it makes sense for retail outlets to invest in upgrading their payment terminals sooner rather than later.