Canada’s First Contactless Mobile Payment Demoed by Interac and Partners

by Istvan Fekete on March 28, 2013

With the market for cash transactions under $20 forecasted to be worth more than $90 billion per year, the next “gold rush” seems to be in mobile payments. Canadian telcos, baks and payment networks are now rushing to enter into the market to take their share of mobile payments, driven by the fast adoption of smartphones.

On Wednesday another player entered the market: Interac Association, a national provider of debit-card services completed Canada’s first mobile-based debit transaction. Its partners currently are Royal Bank of Canada and Moneris Solutions Corp., a payment processor.

The novelty of this transaction: Up until Wednesday, mobile payments were limited to credit card based transactions only, through a joint venture between Canadian Imperial Bank of Commerce and Rogers.

The transition to mobile purchases is natural, because smartphone owners are using their handsets to make purchase decisions when they are in a store, through price comparison apps or sites.

According to Interac’s data, debit card transactions account for 56% of Canadian payments when not paying with cash. Backed by this data, Interac plans a broader rollout of its mobile debit service, called Flash.

Flash was demoed on Wednesday at a McDonald’s restaurant in downtown Toronto using a BlackBerry smartphone, which has an NFC chip built-in, meaning it can emit a signal to a contactless payment terminal.

One of the great features of Flash by Interac is that it was designed to work for all wireless carriers. In other words, users don’t have to be Rogers subscribers to use Flash mobile payment, the conditions being: have an NFC-enabled smartphone and a bank that offers the Flash mobile service.

And the start is indeed good: From what we’ve learned, RBC, Toronto-Dominion Bank, Bank of Nova Scotia and Sunova Credit Union already offers Flash-enabled debit cards. Furthermore, retailers are lining up to adopt this latest mobile payment trend: Alongside McDonald’s, contactless debit card payments can be made at Tim Hortons Inc., Petro-Canada and liquor and beer stores in Ontario.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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