Apple Pay hits UK market, giving consumers contactless payments

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Apple Pay has been launched in the UK, allowing consumers to make contactless payments using their iPhone or Apple Watch.

The UK has become the first market outside of the United States to be offered the payments service.

Only owners of the iPhone 6 and Apple Watch are able to use Apple Pay, which is available in "hundreds of thousands" of locations across the UK. Among the retailers that accept payments are Marks and Spencer, McDonalds, Starbucks and Subway.

Apple said it is hoping to add further retailers and restaurants, such as Costcutter, New Look and Five Guys, soon.

[Read more - Operators sterilised mobile payments market for five years, claims UK transport exec]

The manufacturer has built an NFC antenna into the iPhone 6 and Apple Watch. To pay with the former, users need to hold the device near a contactless terminal while their thumb is on the Touch ID fingerprint scanner. Apple Watch users need to double click the side button and hold the screen to the contactless terminal.

When a user registers a payment card with Apple Pay, the manufacturer generates a unique device account number. This number is encrypted and securely stored on the secure element on the device. Each time a payment is made, the device account number and a unique dynamic security code is used to process it.

Owners of the iPad Air 2 and the iPad mini 3 are also able to make purchases within participating apps by using Apple Pay.

Apple debuted its contactless payment system in September last year, with rival Google reinventing its Wallet service during the summer.