Apple to offer Apple Pay in UK in July, backed by banks, retailers

By Eric Auchard

BERLIN, June 8 (Reuters) - Apple Inc (NasdaqGS: AAPL - news) plans to introduce its mobile payments service to the UK next month, supported by major banks and high-street retailers and the operator of the London Underground, the technology company said on Monday.

Apple Pay will be available in 250,000 locations across the UK when it launches in July, making it more widely available than when it was first introduced in the United States in October, the company said.

The payments service allows consumers using the latest Apple (Swiss: AAPL.SW - news) phones, tablets and smartwatches to buy goods or services by holding the device up to contactless readers installed by merchants.

Apple executives speaking at the company's annual developer conference in San Francisco also introduced improvements to Apple Watch and a new streaming music service it will offer worldwide starting on June 30 for $9.99 (6.52 pounds) a month.

The consumer electronics giant said eight of the most popular UK banks would support Apple Pay when it opens next month, with more banks to follow in the autumn.

It said well-known retailers Boots, the UK pharmacy unit of Walgreens Boots Alliance (Xetra: W8A.DE - news) ; Costa Coffee, a unit of Whitbread ; department store Marks and Spencer and supermarket Waitrose have all lined up to support Apple Pay. Several major airlines, travel agents, hotels and taxi firms have also signed up, Apple said.

Commuters and tourists using the London Underground will be able to swipe their Apple phones at station turnstiles to pay for tickets, Apple said. Already, existing U.S. Apple Pay users visiting London can pay for trips on the Tube, according to officials of the network's operator, Transport for London.

Britain is expected to be fertile territory for Apple Pay. Contactless payments have surged in popularity in recent years, while the U.S. market remains in the early stages of contactless adoption by consumers. Analysts say contactless payments in the UK first caught on with consumers using pay-and-go cards on the Tube.

Apple said Apple Pay will be supported by more than 70 percent of credit and debit cards in use in the UK. In separate statements, credit card giants Visa Europe, Mastercard and American Express confirmed they would support Apple Pay in the UK.

MasterCard said it is working with several banks, including HSBC Holdings (HKSE: 0005.HK - news) , RBS (LSE: RBS.L - news) /Natwest and Santander , to make their MasterCard credit, debit or prepaid cards work with Apple Pay. Nationwide Building Society (LSE: CCDS.L - news) also said it would support the Apple payments service. Bank of Scotland, Coutts, Halifax, Lloyds Bank, MBNA, M&S Bank and TSB Bank are among those that will join in autumn.

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 (1 British pound = $1.5339) (Additional reporting by Julia Love in San Francisco)