Apple Pay has been available in the UK for nearly five years now, when it launched in July 2015 and unlike other countries where Apple Pay has launched since, here in the UK we have had contactless cards for a while too – since 2007, which on the surface seems very similar to Apple Pay and Google Pay.
What is a contactless card?
To understand the difference between Apple Pay and contactless, we first need to look at what a contactless payment is. Contactless cards have a small chip imbedded inside which holds vital information about your card, when you hover the card over the reader (RFID reader) the card transmits the necessary information and the payment goes through. It actually works by the card having coils inside which picks up a very weak magnetic energy from the reader, which in turn temporarily gives the card and therefore the chip some energy.
Contactless technology is imbedded into all sorts of devices, from smartphones, smartwatches, credit and debit cards, key-fobs and even mugs from Costa Coffee.
Contactless cards on paper seem very insecure, if someone had your card they could go and use it everywhere they wanted too, but while this is true there are some security measures in place. For a start,
here in the UK the payment limit for one contactless transition is £30, with talks of increasing this limit to £45. there is an upper limit to how much you can spend in one tap, back in 2015 the limit was increased from £20 to £30 and in the last few days, the limit was increased from £30 to £45. Also there is a limit of how many contactless transactions you can make before the pin needs to be entered.
What is Apple Pay?
Apple Pay is often confused with contactless payments and is deemed to be the same thing. While on the face of it, it’s not hard to see why it is.
Apple Pay is similar to contactless, instead over RFID – iPhones and Apple Watch devices use NFC to communicate with the payment reader. Also to be able to pay for something above the £30 contactless limit, the shop has to accept Apple Pay which basically means the card reader and the payment gateway (i.e what company is handling the transactions) has an agreement with Apple. Back in 2015 and even 2016, a lot of shops accepted contactless, but not Apple Pay which meant Apple Pay purchased in that shop, were capped at £30.
But nowadays in 2020, it is very uncommon to find a shop in the high street which doesn’t fully accept Apple Pay. There is a spending limit per transaction when using Apple Pay, of £10,000.
So you may ask, so what is the difference between Apple Pay and contactless?
You may be reasonable to assume that if the store in question doesn’t accept Apple Pay fully but does accept contactless, what is the difference between using Apple Pay and using contactless?
Apple doing what Apple is best at has built Apple Pay in such a way which benefits privacy, when you make a purchase in a shop or online using Apple Pay, Apple is acting as the middle man between the shop and your bank or credit card company. This means the shops and online retailers never see your real credit card number, which helps reduce the possibility of fraud.
When you add your credit card to Apple Pay in the Wallet app, the virtual card gets a brand new card number assigned to it and if the same card gets added to your Apple Watch, another number gets assigned to it as it is device specific.
Even when using your iPhone or Apple Watch in shops where Apple Pay isn’t fully accepted, it is still much more secure than using a contactless card as the real card information is handled by Apple and also, the payment is authorised by biometrics, i.e Touch ID or Face ID.
What else can Apple Pay do?
Since Apple launched Apple Pay, it has expanded the service to offer a few extra things. Notably, Apple Pay Cash which is only offered in the US at this time, this allows iMessage users to send cash directly to each other.
Apple Pay can also be used on the web as a ‘one click’ checkout process, meaning no need to log in to a website to buy something, Apple Pay provides the shipping address and best of all, your payment information isn’t sent to the merchant. Just use Touch ID or Face ID on iOS or use an Apple Watch to authenticate when buying something on the web on a Mac. MacBooks with Touch ID can also use Apple Pay too.
Also here in the UK, Apple launched Apple Pay Express Card for the TfL system recently which allows a dedicated card to be used without unlocking your iPhone or Apple Watch on the Transport for London network.