Apple Pay Launched in the UK, With Hiccups

Apple introduced mobile payments in Britain on Tuesday, hoping to make a splash with consumers familiar with using cards for tap-and-go purchases, as resistance from hold-out banks and stores appeared to evaporate.

Starting Tuesday, Apple Pay is set to be available in 250,000 sites, from Tube stations to coffee shops, supermarkets and travel services, making it more widely available than when it was first introduced in the United States nine months ago.

Users first load their credit and debit card details into an app on their Apple phones or watches. To pay, customers hold the device near a contactless terminal with the user's fingerprints confirming their identity.

The service is one of Apple's biggest bets, a way of binding customers more tightly to its phones and new smart watches, as well as taking a small slice of every retail transaction.

Apple Pay will eventually be supported by all major British banks. The last hold-out, Barclays, confirmed on Tuesday its debit card users and Barclaycard credit card customers will be able to use Apple Pay in the future.

However, there also were some first-day teething problems. Another major bank, HSBC Holdings said it was having technical problems that will lead to a two-week delay before its clients in the United Kingdom can sign up to the service.

Morning subway commuters in the capital were greeted by advertisements from several major banks encouraging the fraction of their customers with the latest-model Apple phones, tablets and smartwatches to link their payment cards to Apple Pay.

Tube-operator Transport for London and big retailers Boots, the British pharmacy business of Walgreens Boots Alliance; Costa Coffee, a part of Whitbread; supermarkets Marks and Spencer and Waitrose all lined up to support Apple Pay.

Part of Apple Pay's appeal to banks and merchants is its higher level of security than most other electronic payment methods to date, and its ease of use, once customers wade through the bureaucratic process of connecting their accounts.

But unlike the consumer electronics business, where Apple regularly releases new computers or phones in dozens of countries at once, there is no such thing as a unified payments market, slowing expansion to further markets.

So far, Apple has been reported to be working to introduce its mobile payments service in China, South Korea and Canada.

© Thomson Reuters 2015