Fewer Than 25% of Canadians Have the Tools to Use Mobile Payments, Study Says

by Istvan Fekete on August 12, 2015

The Canadian Bankers Association released a white paper last month outlining principles for secure, wide-scale adoption of innovative products and services in the Canadian payments industry. The white paper outlines the evolution of mobile payments in Canada, and also reviews the risks associated with various types of mobile payments.

The paper was guided by three principles: the need for security, the need for openness, and the desire to support innovation in mobile payments.

Looking back over the past few years, the white paper discusses the evolution of mobile payments in Canada and notes that it is currently estimated that “fewer than 25% of Canadian consumers have all the required elements to participate in mobile payments”. The main challenges of mobile payment adoption include limited penetration of NFC-enabled of point-of-sale devices, and a lack of interoperability between issuers, mobile devices and mobile network operators.

Open mobile wallets include Apple Pay, Google Wallet, Samsung Pay, none of which are yet available in Canada, while UGO Wallet and the Starbucks payment app are already used by Canadians.

On the potential risks side, open mobile wallets involve interactions between many unrelated third parties and could be more prone to fraud. The risk emerges from the reliance on third parties, and data privacy and data ownership issues such as transactional data, location data, etc.

Even with Apple Pay, there were incidents of fraud, not because the platform is insecure but because the Apple Pay customer verification process allowed fraudsters to register and use stolen cards. The weak chain in the link is the customer verification process, which is done by banks, and this will be an ongoing challenge.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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