Kirk McElhearn, writing for MacWorld, makes the case that though Apple Pay will certainly be a big deal in the US, it won’t have the same disruption potential in Europe.
That’s because, in Europe, credit and debit cards are based on a chip-and-PIN (personal identification number) system, rather than the swipe-and-sign system more common in the U.S. Chip-and-PIN cards use an embedded chip, rather than a magnetic strip, to encode your identity data. And they rely on your entering a four-digit personal identification number, rather than just signing your name or swiping the card through a reader, to endorse a transaction.
Because of this chip-and-PIN technology—first used in France more than 20 years ago, and widely used for more than a decade in other countries on the continent—fraud is substantially lower in Europe than it is in the United States, where it cost $5.3 billion in 2013.
Solid premise, though I suspect that if Apple Pay gains enough traction in the US, the desire for tourist dollars and compatibility with US payment mechanisms (phones/watches/etc) will provide the force needed to cross that chasm.
What a shortsighted article.. ignores all benefits of Apple Pay.
It may, yes. But not for security concerns. Convenience might be the driving force. It’s that “multiple-cards”-problem. Each card has its own PIN you have to remember.
Good conclusion from Dave, but I wonder how this would work with, say, a US card in the EU. Theoretically, there shouldn’t be any difference, but there might still be.
Speaking as a Brit it might well depend on how easy it is to integrate Apple Pay into normal contact-less readers. Those aren’t particularly common yet but are starting to get rolled out in significant numbers. More interesting for me is the idea of on-line stores using Apple Pay as that seems to be the more obvious venue for fraud these days.
Actually, we’re starting to adopt NFC card payments – in the UK, anyway. The roll out is slow, but more and more shops are replacing their card readers to ones that will be compatible with NFC enabled bank cards, and so by extension, Apple Pay.
Additionally, the London public transport system should be entirely compatible by the time it launches over here.
Apple Pay is all about convenience, not security. Consumers don’t think that the current system (in the US) is particularly insecure. But I think many people would rather not carry wallets with them or just use their phones. Think about it, next time you are queuing at the grocery store, check out how many people are looking at their smartphones….
If and only If Apple plays the privacy card stronger and much more prominently it will gain traction in the EU. As things stand today anything that gains traction in the US is widely seen as yet another NSA data collection method. People here, thanks to weakly researched media articles, still believe your fingerprint is getting transmitted to the NSA when using TouchID.
Also, tourist Dollar? No problem – they’ll still bring their credit cards along. Apple Pay is a convenience issue here – and there is a chance of gaining traction by data anonymisation, but more turnover as a result I fail to see.
as Darren and Stephen pointed out, contactless payments are here, at least here in London it’s pretty standard everywhere I go, coffee shops, pubs, restaurants
“London public transport system should be entirely compatible by the time it launches over here.” – you can use contactless option now
almost all new card readers are compatible with NFC (limited to 20€ though) since 2 years in France, so adoption could be almost instantaneous, I think
“ how this would work with, say, a US card in the EU„
The same way a French, UK card works in the US (which you should be familiar with, having lived in France and living now in the UK): you get one from your bank with international payment (VISA, MasterCard or even an AmEx — which are btw, the named partners of Apple for Apple Pay)*
… unless that wasn’t the question.
ApplePay isn’t a new Protocol for Bank Payment, It’s a New way to initiate those Payments using the same protocols.
The PoS equipped with NFC (for Tap to Pay and others) could receive an update to recognize ApplePay, but once initiated the conversation between the PoS and the Payment central will be the same.
Tapping a iPhone to a payment terminal seems somewhat less complicated than tapping a card and entering a PIN. One less step and four fewer digits to remember. That’s kind of disruptive.
Changing payment systems to accommodate tourists from the United States? Doesn’t sound like the Europe I know.
It’s not like SmartCard were invented in France, or as if the majority of PoS and Debit Cash had VISA, MasterCard Logos already on them…
Oh wait… Well… actually… nope that’s It.
Nothing like what you’d know about Europe…
I seriously doubt anyone will be making travel plans based around the availability of Apple Pay.
And once tourists reach their destination, they must pay. And they will use whatever payment methods are available.
It’s laughable to insinuate that people might change shops at home based on the supported payment methods. Claiming that people might attempt that in a completely foreign place is ridiculous.
Most tourists in Europe are from Europe or from Asia. Given these odds, you probably don’t know Europe at all 😛
The issuing bank would need to support the same protocol, because that’s how the card gets added to Passbook (if I understood the presentation of ApplePay correctly). After that, I assume it would be transparent. But there are a lot of unknowns; it’s entirely possible that banks won’t allow such payments outside of issuing territories (such as North America, Europe, etc.).
With contactless cards, you only tap the card to the terminal; you don’t have to enter a PIN. However, they are currently limited to about £20 or €30 per payment, depending on the country.
And you’ll still need to remember your PIN with Apple Pay, for times when the readers are down, or when you want to check your balance or get cash from an ATM.
I’m always amused by “Apple will fail at…” articles. I mean they certainly may, but at this point isn’t it prudent to give Apple the benefit of the doubt?
First, I will never understand how chip and PIN is secure without the PIN. No authentication. Anyone can swipe your card and make a dozen small purchases. Apple Pay offers ID authentication every time with no added time cost.
Second, how would you use Apple Pay when the reader is down and how would you use your PIN in that instance?
Third, at least for the time being, Apple Pay is only for paying. If they’re working with the banks on other type of transactions, it hasn’t been mentioned yet.
Wow, really? You think that one can make purchases just by swiping it? That’s the point of the PIN; you can’t make purchases without it.
« possible that banks won’t allow such payments outside of issuing territories»
Me earlier : « you get one from your bank with international payment (VISA, MasterCard or even an AmEx — which are btw, the named partners of Apple for Apple Pay)»
All Banks have National and international versions of the Debit/Credit cards (With Visa, MasterCard or AmEx)
No reason to doubt the Payments options wouldn’t be extended into their managed by ApplePay counterpart…
Société Générale :
https://particuliers.societegenerale.fr/essentiel_quotidien/cartes.html
Bank Of America :
https://www.bankofamerica.com/credit-cards/view-all-credit-cards.go
Crédit Suisse :
https://www.credit-suisse.com/ch/en/privatkunden/kontokarten/karten.html
HSBC :
http://www.hsbc.com.hk/1/2/hk/cards/
“With contactless cards, you only tap the card to the terminal; you don’t have to enter a PIN.”
“That’s the point of the PIN; you can’t make purchases without it.”
Okay, now you’re just trolling me.
In Poland we see massive adoption of contact-less card readers, from the biggest retailers to the smallest one, both in big and small cities. We’re one of the leading countries in Europe in availability of NFC card readers and NFC card holders. It was imposed by banks, because they issue only NFC cards to all their customers. You don’t have a choice;) There’s only one catch resulting from security reason: contact-less payment (no PIN, just a tap) are limited to 50 zlotys (17$).
So I suspect that Europe will likely fall in love with Apple Pay just as with iPhone, thanks to its security, convenience and ease of use.
I thought you were talking about swiping; that’s the word you used. Yes, with contactless cards, you can make multiple purchases without a PIN, but there’s a limit to the number of purchases. And like any anti-fraud system, there’s a way of detecting whether people are making in habitual payments. When that happens, you do have to enter a PIN with the contactless card.
The reason for the meh is that this is basically the system they already have in Europe. The only difference is the bank part of the equation to load the ‘device account number’.
Which tourists won’t help with all much because their accounts are in the US.
The system will likely come to Europe eventually but it is the US that needed it so much, thus the focus is here
I left France a year and a half ago, and hadn’t heard anything about contactless cards from my bank (Crédit Agricole). So I missed out on that. But remember that the French banks bet – and lost – on Monéo, so they might be more hesitant than some countries’ banks to move to another new system.
There are plenty of Contactless readers in the UK, including most of the London bus and tube network.
This will be a huge thing and much needed.
Hopefully it will also get rid of the hateful and useless Verified by Visa system for online payments.
No it’s about both.
And while consumers don’t think the current system is insecure, banks etc know different. The insurers are losing tons covering fraud and they don’t like it. Thus the demand to ditch the easy to forge strip
It’s actually going to be a problem for tourists in London, as you can no longer pay in cash (this has either taken effect already, or will do very soon).
You’d never have to worry about hitting that limit with Apple Pay, nor of anyone tracking your buying habits and making you enter a PIN. Apple Pay is going to be disruptive.
They’ll learn! 😉
It already has happened on the buses, they are cashless. The Tube is switching on contactless support but you can still use cash to buy tickets (at more expense) and top up the Oyster cards
its about both, dude, obviously. in light of the Target and Home Depot breeches millions and millions of americans have been affected and are aware of security concerns thanks to national news attention. this system is much more secure and we like that.
while its true the US needs it more, its not true that this is basically the chip & pin system, no.
Fraud is pretty abstract to people unless they have a problem. That’s not the point.
User behavior flows downhill like water. If it’s easier then they will use it. V1 of Apple Pay is like V1 of iTunes and the iPod. You bought your plastic discs, your ripped them on your computer, your transferred them to your iPod. People did it for the convenience of carrying all their music. And it was magic.
People will receive their plastic credits cards and scan them into their iPhones so they can carry them with them. The first time they pay with their phone it will be magic.
Why this will work is what comes next. Banks and cc agencies will send credit cards directly to your phone. You’ll pay for things in applications and on the mobile web with the touch of your thumb. You’ll pay for your daughters school supplies when she’s at college from your email. And on and on.
Just like selling music through iTunes this will take off because of what comes next. Consumers will want it because it’s magic and everything else will feel antiquated. Banks, cc agencies, and merchants care about fraud but they also care about customers buying their services. They’ll follow the consumers.
Indeed so. I was allowing for outlying areas where it may not yet 100%.
Crédit Agricole never has been the most forward looking of French bank (great for independent workers, but lousy on inter agencies management, not even talking about operations with other banks).
Monéo was a bust so were the dozen of previous attempts of electronic wallets, but they (French banks) try and try again. (Fail often, fail fast).
But regarding NFC powered TapToPay, most French Bank have joined the system (systematic deployment from april 2014 by default without added charges) despite each having their own trademarked way to refer to It.
ApplePay won’t come from each and every individual bank but from above : the international option with VISA or MasterCard or AmEx.
NFC has been fully deployed for public transportation in major French cities since 2005 (started pilot programs in 2001, 2003 and 2004…)