Why Canada’s Soft on Mo­bile Tech

The suc­cess of con­tact­less pay­ments in Canada has given con­sumers less in­cen­tive to switch to mo­bile de­vices at the point of sale.


Mo­bile wal­lets have failed to ex­cite many con­sumers, but Canada has an ex­treme case of paral­y­sis un­der­scor­ing the stark need for on­go­ing in­cen­tives to get con­sumers to change their pay­ment habits.

Canada’s strong mo­men­tum in con­tact­less pay­ments would seem like an ad­van­tage that sets the stage for mo­bile, but it also shares many of the sell­ing points that mo­bile wal­let providers ad­ver­tise. This may be one rea­son third­party wal­lets took their time launch­ing in Canada, with An­droid Pay mak­ing its de­but last May, two years af­ter its launch in the U.S.; and Ap­ple Pay fi­nally go­ing live with Sco­tia­bank-owned Tan­ger­ine Banks last week.

“Cana­di­ans are al­ready so wellen­trenched with tap­ping con­tact­less plas­tic cards to make quick pay­ments ev­ery­where that they don’t see the value propo­si­tion in get­ting out their phone to pay,” said Mia Hunt­ing­ton, Elavon Canada’s se­nior vice pres­i­dent and gen­eral man­ager.

In Canada, Elavon played an ac­tive role in help­ing mer­chants adopt con­tact­less pay­ments tech­nol­ogy, with most mer­chants sup­port­ing Near Field Com­mu­ni­ca­tion. This is in con­trast to the U.S., where less than a third of mer­chants have NFC, Hunt­ing­ton said.

Canada’s con­tact­less pay­ment vol­ume rose 60% last year to $100 bil­lion over the pre­vi­ous year, reach­ing nearly 2 bil­lion trans­ac­tions, ac­cord­ing to Toronto-based Tech­nol­ogy Strate­gies In­ter­na­tional’s new Cana­dian Pay­ments Fore­cast 2017.

But mo­bile pay­ments tech­nol­ogy so far has not shared this mo­men­tum.

“Canada was ahead of many other coun­tries with its NFC in­fra­struc­ture, and many were watch­ing with bated breath to see what would hap­pen when third-party mo­bile wal­lets rolled out, but it’s clear now it will take a dif­fer­ent kind of in­cen­tive to get con­sumers in­ter­ested in mo­bile pay­ments,” Hunt­ing­ton said.

If con­sumers aren’t get­ting a bet­ter deal by pay­ing with mo­bile, there won’t be much adop­tion of An­droid Pay and Ap­ple Pay, she says.

“The only thing likely to in­ter­rupt the sta­tus quo is when mo­bile pay­ments can de­liver spe­cific of­fers based on a con­sumer’s pref­er­ences and loy­alty, and no one is bet­ter po­si­tioned to do that than Google,” Hunt­ing­ton said.

Mer­chants are mak­ing rapid progress in adopt­ing in-app pay­ments tech­nol­ogy, which also may help nudge mo­bile pay­ments adop­tion ahead, she said.

“Cana­di­ans ... don’t see the value proposi­ton in get­ting out their phone to pay,” said Mia Hunt­ing­ton, Elavon Canada’s se­nior vice pres­i­dent and a gen­eral man­ager.

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