Mo­bile Pay­ments Mark a New Evo­lu­tion in Shop­ping

National Post (Latest Edition) - - FINANCIAL TECHNOLOGY - San­dra MacGre­gor

While Cana­di­ans all have their own unique shop­ping habits, there are gen­er­ally two things we can all agree on: we want to save time and we want to know our pay­ments are se­cure. While the quick and con­ve­nient tap-and-pay method for debit or credit cards helps consumers save time, few peo­ple may be aware that there is an equally fast yet much more se­cure wayto make your pay­ments via your mo­bile phone. Con­tact­less pay­ment “We see a lot of consumers in Canada us­ing con­tact­less trans­ac­tion pay­ments with credit cards but not with phones,” says Giles Suther­land, Vice Pres­i­dent of Strate­gic Al­liances at Carta World­wide, a Cana­dian Fin­Tech start- up that spe­cial­izes in mo­bile pay­ments in in­ter­na­tional mar­kets. A wave of new prod­ucts and ser­vices is ex­pected for the Cana­dian mar­ket as global in­no­va­tions start to im­pact the Cana­dian mar­ket. “There have been attempts over the years to in­tro­duce mo­bile phone pay­ments but, for the av­er­age Cana­dian mo­bile pay­ment is al­most non ex­is­tent.”

Cell phone pay­ments may get more pub­lic­ity with the re­cent launch of Ap­ple Pay in Canada. How­ever, ac­cord­ing to Suther­land, one rea­son for the slow adop­tion of mo­bile phone pay­ments may be be­cause many Cana­di­ans do not ap­pre­ci­ate just how much more se­cure their fi­nan­cial in­for­ma­tion is with their cell phones. To­k­eniza­tion Thanks to to­k­eniza­tion (a process where sen­si­tive card data is re­placed with a new en­crypted val­ues) a user’s credit card in­for­ma­tion is never ac­tu­ally in­put into the phone. “You can leave your card at home,” ex­plains Suther­land. “Your in­for­ma­tion is never passed on, so those big breaches of per­sonal credit card in­for­ma­tion that we hear about in the news be­cause some­one gets hold of a con­sumer’s actual credit in­for­ma­tion can never hap­pen, be­cause a to­ken stops that from hap­pen­ing. With to­k­eniza- tion, you’re tak­ing a mas­sive amount of pos­si­ble fraud ex­po­sure out of the sys­tem.”

Adam Nan­jee, Head of Fi­nan­cial Tech­nol­ogy, MaRS Dis­cov­ery District, agrees with Suther­land’s as­sess­ment of the se­cu­rity of mo­bile pay­ments. “Canada is amongst the world lead­ers in terms of mo­bile se­cu­rity, with a vi­brant scene of ven­tures and start- ups work­ing to de­velop in­no­va­tion solutions in se­cu­rity and au­then­ti­ca­tion. Canada’s large fi­nan­cial in­sti­tu­tions have proved more re­spon­sive than banks in other coun­tries to adopt­ing dis­rup­tive tech­nol­ogy.” En­hanc­ing se­cu­rity Se­cu­rity is fur­ther en­hanced be­cause mo­bile phone pay­ments can also be given strict pa­ram­e­ters that can limit the max­i­mum amount of pur­chases al­lowed or even what kind of pay­ments are per­mit­ted. Fur­ther but­tress­ing con­sumer se­cu­rity are the safety mea­sures de­signed specif­i­cally for cell phones them­selves. Un­like a con­ven­tional wal­let, to ac­cess a smart­phone you may need a code or fin­ger­print or even fa­cial recog­ni­tion. “A mo­bile phone of­fers mul­ti­ple lay­ers of au­then­ti­ca­tion. Pay­ments us­ing this method are ex­po­nen­tially more se­cure,” in­sists Suther­land. “To add to that, there are even stud­ies that show you can go for hours with­out real­iz­ing you’ve lost your wal­let, but you will no­tice you’ve lost your smart­phone within min­utes.”

Mo­bile pay­ments don’t just of­fer users bet­ter se­cu­rity; they also al­low for en­hanced us- er ex­pe­ri­ences. For ex­am­ple, at your lo­cal cof­fee shop you could place and pay for an or­der through an app on your phone so that by the time you ac­tu­ally get to the store you just pop in and pick up your cof­fee with­out wait­ing in line. Or you could get a ping on your phone as you walk by your favourite store that will let you know there is a sale on your favourite item. Suther­land points out that mo­bile phones will dra­mat­i­cally en­hance the way consumers col­lect and use re­wards, loy­alty points, coupons, or gift cards, and the con­ve­nience of elec­tronic re­ceipts means you don’t have to worry about los­ing a piece of pa­per.

Ac­cord­ing to Nan­jee, mo­bile pay­ments are the way of the fu­ture. “User ex­pe­ri­ence is para­mount in the mo­bile world – it only takes one bad ex­pe­ri­ence for a con­sumer to switch. Peo­ple ex­pect seam­less prod­ucts, and Cana­dian banks, PayPal and Ap­ple Pay have been de­sign­ing solutions that have built con­fi­dence in mo­bile pay­ments among Cana­di­ans. We are see­ing growth in the num­ber of con­tact­less and mo­bile pay­ments month over month.” Suther­land is equally as en­thu­si­as­tic. “Mo­bile pay­ments will give busi­nesses and consumers a whole new way to mean­ing­fully in­ter­act. They will help consumers shop smarter and drive sales for mer­chants. Tar­geted, value-added ser­vices are one of the most ex­cit­ing fea­tures of mo­bile pay­ments. They are re­ally go­ing to shake things up.”

“...there are even stud­ies that show you can go for hours with­out real­iz­ing you’ve lost your wal­let, but you will no­tice you’ve lost your smart­phone within min­utes.”

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