Canadian Mobile Payments Industry Slow to Meet Demand

by Istvan Fekete on May 24, 2013

The demand for a mobile payment solution is apparently very high on Canadian soil. As two PayPal studies show — one released last year, and the second one recently — Canadians are ready to go cashless. In fact, there is a significant rise in the percentage of mobile users who are losing interest in their wallets.

Last year, a PayPal study found that more than 70% of Canadians are ready to drop cash and use digital payment instead. This number is up from 27% recorded in 2011.

This year, the number of Canadians ready to go cashless rose to 87%, according to the PayPal survey. What’s interesting though, is that it’s mostly the younger generation (aged between 18 and 24) who are ready to go cashless.

The unfortunate news is that Canadian businesses aren’t quite ready to receive payments through mobile phones, as the majority of those surveyed admitted that they couldn’t pay for purchases with their mobile phone.

But how does the mobile payments solutions stack up in Canada?

Of course, PayPal has its own solution for boosting Canadian mobile payments. Back in March 2012 they introduced PayPal Here, their foray into the mobile payment solution. The solution came with a simple flat rate of 2.7% for card swipes and PayPal payments.

Six months later, the partnership between Rogers and CIBC has borne its own fruit: the two launched their own NFC mobile payment solution, Rogers Suretap, which is a combination of an NFC SIM connected to the user’s CIBC Visa or MasterCard credit card account. PayPal was surprised to find that the companies claim they had the first mobile credit card transaction on Canadian soil.

Since then, another wireless player, Bell, has revealed its partnership with RBC to launch their own mobile payments solution to help kick start the Canadian mobile payment industry. According to their press release, the NFC-based payment solution will be available by the end of the year.

Meanwhile, a PayPal executive suggests that even Apple is eager to pave the way for mobile payments, as the next-generation iPhone will sport a fingerprint scanner, which will end the era of passwords.

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

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