Market Insight

Barclaycard’s UK wearable payment plans will struggle to compete with Apple Pay

July 01, 2015


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Barclaycard, the UK card issuer of the Barclays banking group, is relaunching its bPay contactless payments system in July with three new NFC devices: an updated wristband, key fobs and stickers.

The service allows users from any bank with a UK-registered Visa or Master debit or credit card to add money to a pre-paid account online, from its mobile app, or set up auto top-up. At launch, payments will be limited to £20 but will rise to £30 in September when UK limits are raised.

The wearables are available online from July 1st at the price of £14.99 for the sticker, £19.99 for the fob and £24.99 for the wristband. Consumers can buy the devices on high street stores from August.    

Our Analysis

bPay vs Apple Pay

The unveiling of bPay wearable payments at the same time with Apple Pay’s launch in UK is no coincidence. Barclays is the only major bank in UK not accepting Apple Pay. By offering its own contactless payment wearables, Barclays gets to keep transaction fees from consumer spending instead of giving a share to Apple.

Barclays has had several attempts with payments and wearables:

-2007, launched UK’s first contactless card

-2012, introduced Barclaycard Paytag NFC stickers   

-2012, launched Pingit, a mobile payment service linked to users’ phone numbers to transfer money and pay bills

-2014 July, trialled bPay wristband  

-2014 December, trialled contactless gloves for tap and pay

Most of these services have yet to gain traction due to lack of solid use cases.  Barclays is trying again by offering new wearables in an effort to retain and attract new customers. However, as these devices come at a cost, it will be hard to convince non-Barclays customers or those with Apple Pay-capable devices to switch services. Persuading users to pay extra for an additional single user accessory – one that only works for payments – will severely limit the take-up of these services. To drive mass adoption of its contactless payment services, Barclays should provide devices for free, or better still, partner with third-party device and accessory makers to support payments on more compelling devices.

Increasing contactless transactions in UK

The adoption of contactless payments in the UK has been surging as the UK Cards Association reported a total contactless spending of £2.32 billion in 2014, a 331% increase year-on-year.  

 

Geography
UK
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