Apple pay awaits support of canada’s banks
Ever since Apple Pay’s U. S. launch last October, its expansion north had been hotly anticipated.
The software’s slick design was supposed to dazzle and entice people to install every payment card they own on it and never carry a leather wallet again. It was supposed to be what other mobile apps haven’t been: simple, useful, easy to use, elegant and inclusive.
Apple Pay in Canada has many of these attributes but if there’s one thing it hasn’t been, it’s inclusive. When it arrived for use on Apple’s latest devices in late November, it sidestepped Canada’s largest lenders and the world’s biggest card networks.
In the U. K., Apple Inc.’ s mobile wallet app supports payment cards from more than a dozen banks. In the U.S., that number is even higher. In Canada, Apple Pay works only with cards issued by American Express Co., which says it has 4.6 million credit cards in Canada and a market share of 8.2 per cent, referring to data from the Nilson Report.
But it looks like the door is being held wide open for others to sign on to the platform at any time.
“This is not, by any means, exclusive to American Express,” Suat Alaybeyoglu, vice- president of consumer acquisition and management for American Express in Canada, said in a recent telephone interview. “We’re just the first issuer to launch it. I have no idea why the other banks didn’t launch it and I don’t know what the other plans are. The reason I am being cautious is maybe they (other issuers) enabled it this morning.”
None of the big banks or other credit card issuers have indicated they plan to support Apple Pay, as of Monday. A Toronto- Dominion Bank webpage advertised in October that the service would be “coming soon” to its Canadian clients. The page was removed and a spokesperson for TD apologized in an email to the Financial Post for “any confusion resulting from incorrect info temporarily on our website.”
Exactly why the big banks aren’t signing on to Apple Pay remains unclear. According to analysts at CIBC World Markets, even if Apple captured 30 per cent of all credit card transactions and 10 basis points per sale, “the impact on earnings would be immaterial for the sector in the near to medium term.”
A month into Apple Pay in Canada, Amex won’t reveal much about early usage, other than how “provisions have exceeded our expectations,” without disclosing its expectations, and that it’s “seeing the most traction at coffee shops and quick-service restaurants.”
A spokesperson said the “majority” of its cards are equipped with the technology that’s needed to conduct a contactless payment, but would not specify how many. The company wouldn’t say how many terminals or retailers in Canada can accept an Amex payment either.
Around the launch of Apple Pay on Nov. 17, Moneris Solutions Corp., Canada’s largest payments processor, had bolstered staff at its call centre to handle an anticipated flood of calls from merchants who were experiencing issues. In- stead, it was quiet and more often than not, a call was about how a retailer didn’t accept Amex in general.
“It comes down to ubiquity of cards. For it to deliver on what I would consider ideal, you would have every Canadian that has a card have the ability to load that card into Apple Pay. That hasn’t happened yet,” Rob Cameron, chief product and marketing officer at Moneris and a fan of Apple, said during an interview.
“In a perfect world, you’d have every phone user, regardless of where their card is from, take a picture of it and load it onto a phone. It needs to be easy for the consumer. That’s what’s going to drive the best experience.”
Interac Association, the non-profit that runs the debit card system in Canada, prefers ubiquity instead of a closed system, too. According to internal statistics, Interac has seen usage of the contactless offering it calls Flash, which lets users wave their debit card over a payment terminal instead of inputting a security key, increase by 163 per cent in 2015 compared to last year. So far, Royal Bank of Canada and Bank of Nova Scotia offer their clients the ability on their own mobile apps to pay at a store with their debit card using select phones.
“Our goal is to have Interac Flash available on every wallet,” said Avinash Chidambaram, who leads mobile products, platforms and services at Interac.
“We are working with our issuers, and we enable our issuers to deploy into different wallets. They, largely, need to make the decision to put our credentials into any wallet they wish to support. We’re working on the technology and will be ready when our stakeholders are ready.”