Apple Pay will be arriving for customers inside of the United Kingdom, backing support from about 250,000 UK merchants, sometime in July. Today, Apple released a support and FAQ page on its website to document the processes and answer the questions that some merchants may have with the impending launch of the service (via 9to5Mac).
Following the confirmation by multiple banks on the matter earlier this month, Apple has confirmed that some retailers and specific out-of-date terminals will hinder customers to a £20 limit on their Apple Pay purchases (which will increase to £30 in September). However, the company does state that merchants with terminals "capable and configured properly" -- and a payment provider that supports the most up to date specifications on contactless payments -- will be able to support larger transaction sums.
Apple Pay allows your customers to make easy and secure contactless payments at any amount. If your payment terminal or payment provider doesn’t support the latest network specifications, as with contactless debit and credit cards today, your customers might need to insert their card if the transaction amount is over £20.
To accept Apple Pay for transactions over £20, your payment terminal must be capable and configured properly, and your payment provider needs to support the latest network contactless specifications.
The process for merchants to support a limit raise may be arduous, however, and as such most retailers will be facing the £20 right out of the gate when the service launches in July. Retailers supporting the "Consumer Device Cardholder Verification Method," another support document updated today, will be able to enable "contactless payments for any amount." Unfortunately, the security-ensured method requires updated terminal software that may see a slow adoption rate to stores around the United Kingdom in the early days of Apple Pay.
The rest of the FAQ page details the expected list of questions about liable fraud charges for merchants, list of payment providers that support Apple Pay in the United Kingdom, and a process detailing return policies for customers using the mobile wallet. Apple also confirmed during WWDC that London-based Apple Pay users will be able to commute and pay for fares on London's Underground with the help of the service. The company also promised that the service will be backed by eight of the "most established banks" in the country when it launches.
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Long before Apple Pay was even announced, the UK was a pioneer of so-called contactless technology that allowed small transactions (originally up to £10, then later to £15 and now £20) to be paid for with a tap of any NFC-compatible debit card for conveniently buying a sandwich, coffee or newspaper. This was a quicker and faster way than using chip and pin (which the UK has had for years) and without the hassle of cash.
Gradually, more and more merchants have started using the technology, such as the London Underground, but it is still primarily designed for small payments because it doesn't have the security of entering a pin. Hence the limit is for security reasons.
Fast forward to 2015 and Apple, having very wisely chosen to support an existing standard to increase adoption, are using the existing network and hence have to play by the same rules. As adoption climbs and new versions of the technology (as Apple alludes in the document) can differentiate Apple Pay from other contactless cards then this will change, it will just take time. I would fully expect the official partner retailers to not have such limits, which is the positive I take out of the article.
So the limit is nothing to do with Apple Pay. And it wasn't artificially imposed either, it's just a relic of what got us here in the first place.
It has confirmed that the limit will not apply if a retailers software is up to date.
Almost like a headline stating "iPhone 6s and iPad Air 3 to only support 16GB of storage"
Then in the article "....if you purchase the 16GB models. The 64GB and 128GB models will support 64GB and 128GB of storage respectively"
The NFC standard for contactless in the UK was written (obviously) before Apple Pay, when the only contactless payments available were not so secure (No verification, literally just a card swipe), and so a limit was placed to reduce the amount of damage a fraudster could do if they stole your contactless card.
Now Apple Pay has come along and is much more secure than previous methods, but sadly still has to abide by the rules written for the not so secure methods.
So - a new standard has been created for Apple Pay and other subsequent secure contactless payments called "Consumer Device Cardholder Verification Method", but unfortunately this will require up to date hardware on the shop's behalf, and also the latest software running on it.
Once the shops have that in place, payments over £20 (£30 in Sept) will be accepted.