Why Mobile Payments Failed to Go Mainstream in Canada

by Istvan Fekete on October 20, 2015

Only 25% of Canadians have all the components in place to use mobile payments, according to a report issued in June by the Big Six banks. While this may sound good for some, the bad news is that most Canadians aren’t interested in making mobile payments using their smartphone at brick-and-mortar stores.

Reports were loud about the country’s readiness – in terms of infrastructure – for mobile payments. Despite the fact that Canada is at least one step ahead of the US – one in three POS terminals carry the chip and contactless payments systems that represent between 10% and 20% of all transactions – tech analyst Duncan Stewart admits he was wrong in January when he said that mobile payments would gain momentum this year in the country.

“The fragmentation of the mobile payment ecosystem by carrier, device and bank has been a challenge,” said Stewart, director of technology, media and telecommunications research for Deloitte Canada.

We just have to have a quick look at the facts: The Big 3 have joined forces under the Suretap initiative originally launched by Rogers. This means you have the carrier freedom, but another important piece of the puzzle is missing: a banking partner. Only CIBC has so far signed up for Suretap, though they say more banks and cards will join in the next six months.

“The consumer needs to have the freedom to pick whatever phone they want, whatever network they want to be on and whatever card product they want from whatever issuer so that consumers are not feeling they’re being restricted,” Suretap president Jeppe Dorff said. “It sounds like something that is great in principle but the complexity is high with the challenges of creating something that is a single hub.”

Another important component is the device: Suretap is limited to Android and BlackBerry devices, which excludes iPhone users, who account for roughly 40% of the 23 million smartphone owners. Apple, on the other hand, is allegedly readying Apple Pay for launch in Canada this fall, but there is no official launch date yet.

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

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