Pay with phone use ‘hardly noticeable’
Canadians slow to embrace app revolution
Almost two full years before Apple Pay made its U.S. debut last October, CIBC introduced an app in late 2012 that let customers pay for things on their credit card with a simple wave of their BlackBerry. On the strength of consumer interest in survey after survey, other banks soon followed.
The banks that issue credit cards would pay a rental fee to access phones, and wireless carriers were salivating at the chance to snag a piece of the lucrative payments pie. Both parties saw their technology initiatives as another way to make clients less likely to jump ship to a competitor.
“They thought it was going to be a big thing,” says Tim Ryan, a former Bell Mobility employee who recalls the excitement among colleagues a half a dozen years or so ago about how a promising new technology — called near-field communication (NFC) — could transmit data between devices at close distances.
Yet, the response from most Canadians has been underwhelming. Despite our attachment to smartphones and the rapid proliferation of all things digital, the pickup of mobile payments in Canada to date shows again that sometimes old consumer habits die hard and timing for new products is everything.
The number of times Canadians have paid using a cellphone instead of a credit card has been “hardly noticeable,” so much so that the stats “wouldn’t register,” said Rob Cameron, chief product and marketing officer at credit and debit card processor Moneris Solutions Corp., the Toronto-based joint venture between RBC Financial Group and BMO Financial Group.
He has quite a large sample size, too: more than one-third of all merchants in Canada are Moneris clients and 85 per cent of its terminals are equipped to accept a “contactless” payment, Cameron said. In 2014, 10 per cent of credit card transactions in Canada were done by people waving their cards over a terminal, a 200-per-cent jump from 2013.
“How big of a leap will it be for Canadians to go from tapping their card to tapping their phone?” asks Cameron.
“It’s one thing to have the technology, but it’s another thing to have something that delights consumers and causes them to actually use it.”
Numbers from Canadian makers of mobile-payment apps suggest adoption and use have been slow.
CIBC’s Todd Roberts, senior vice-president of non-travel cards and payments innovations, said in an interview that “the numbers are small, as we would expect,” adding that we’re in “the relatively early stages” of using a cellphone for things other than messaging, calling and browsing.
Royal Bank said it’s seeing 20-percent growth per month in adoption on its Secure Cloud, its mobile-payments app.
People may not be using these phone apps to pay in stores, but they’re using them more for banking. As of Oct. 31, 2.5 million Canadian clients use TD’s mobile-banking app, the bank says.