With much fanfare, the latest must-have gadget, the Apple Watch, was launched in the US in the last week of April, followed by a launch in Australia.
Although early stage availability remains limited, and its use in this country as a contactless payments device is dependent on when Apple Pay is launched here.
Estimates from Foad Fadaghi, managing director at tech sector analyst firm Telsyte, suggest that there will ultimately be around 300,000 Apple Watches shipped here, a critical mass big enough to make the case for contactless wearables – if only Apple Pay, the system needed to make it happen, could be launched beyond its US home market.
When Apple launched its payments service in the US, in October 2014, it had on board the six major card-issuing banks and the three major networks as partners: American Express, Mastercard and Visa, accounting for 83 per cent of all US credit card purchases.
Take-up has been accelerating ever since. At launch, 220,000 locations already had the necessary hardware in place. By March this year, Apple CEO Tim Cook was asserting that 2,500 banks now support Apple Pay, as well as nearly 700,000 locations, Computerworld reported in a review of the payment system, almost six months on.
As with the iPhone, payments via an Apple Watch works via a secure element (a dedicated chip) in the watch, and a unique token – a 16-digit code – associated with watch, avoiding the need to store any other numbers or date.
That process requires the use of a Watch app on a supported iPhone, which includes the iPhone 5, 5S, 5C, 6, and 6 Plus. It also requires the presence of a dedicated Apple pay terminal.
However, the US experience has shown it won’t be all plain sailing in having Apple Pay accepted everywhere. Apple Corporation is not known for sharing nicely with other tech players.
That raises a dark question mark over how willing merchants will be to accept Apple Pay if they have to fork out for more dedicated terminals, presumably to sit alongside existing Near Field Communication hardware.
Meanwhile, some local Australian banks and payments systems providers are getting ready, even if it’s no more than a marketing opportunity for some.
For instance, ahead of the Apple Watch launch, St George Bank had launched its own applications to run on the new Apple Watch, with parent company Westpac following soon after with its own branded apps – even so, the use was limited to letting customers check their account balances or finding the nearest ATM or branch.
Rival bank, the CBA, also announced in early April that it was working on similar apps, which would be unveiled once the Watch was launched in Australia.
So where are we now?
There is still no firm news about a larger Apple Pay rollout, beyond comments from CEO Cook that he wants to launch internationally by the end of the year.
At CeBIT 2015, a major technology expo in Sydney, run in early May, a selection of peripheral devices that were capable of converting mobile phones and other devices into Apple Pay terminals were on display. However, that does appear to be, literally, window dressing as far as Apple Pay launching in Australia 2015 is concerned.
For instance, Travis Tyler, head of mobile at St George, told The Australian in April: “This is not something we’re considering at this point” when asked if the bank was working on a contactless payment app for the Apple Watch.
Apple is yet to clarify when it will bring Apple Pay to Australia, and if so, whether it will charge banks commission, which would ultimately be recouped from customers.