Apple Partners with American Express to Bring Apple Pay to Canada This Year

by Istvan Fekete on October 28, 2015

After reporting a record fourth quarter, Tim Cook announced during the earnings call that Apple is joining forces with American Express to bring its mobile payment platform to Canada and Australia as soon as this year.

Although he was careful not to mention a launch date, Canada will join the US and the UK in getting Apple Pay, which allows iPhone customers to purchase goods by tapping their phones or Apple Watches on contactless merchant terminals. Other countries, such as Spain, Singapore, and Hong Kong, will follow next year.

If we compare the US and Canada in terms of payment terminals, we find that Canada is better equipped with contactless POS systems than its neighbour. Apple Pay works only with terminals equipped with an NFC chip. Currently, mobile wallet transactions are limited to Android in BlackBerry devices in the country, which excludes about 40% of smartphone users in Canada from the latest technology trend.

As noted by Rob Sedran, an analyst at CIBC World Markets bank, “Apple Pay will have a meaningful role but hardly a transformational one in Canada.” Average credit card fees made up to 2.9% of revenue in the past four quarters for Canada’s six biggest banks, he added.

Assuming that Apple grabs 10 basis points per transaction, or roughly 150 basis points, and a 30% share of card transactions, the earnings impact would be immaterial for the sector in the near to medium term, Sedran commented.

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

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