In a previous article we published a few days back, we talked about how smartphone payments are expected to replace cash and credit cards as the main payment method by the end of this decade. Following up, if a recent report from Reuters is to be believed, Canada is poised to be there first, as the invasion of smartphone payments is expected to commence there as soon as by the end of this year.
According to Reuters, Canada is currently the leader in developing smartphone payment methods, a title won thanks to the high number of retailers and smartphone owners that have adopted NFC technology. According to Richard McLaughlin, senior vice-president for global products and solutions at Mastercard: “Whether it’s parking, or coffee, or groceries or gas, the acceptance points in Canada are much broader than they are in the United States”.
Statistics show that a decent number of Canadian retailers are already prepared to deal with NFC payments. It is estimated that almost 15% of all retailers in Canada can process smartphone payments in the present, a number expected to rise significantly by the end of the year as more vendors start supporting mobile payments. On the customer side, it is expected that most smartphone owners in Canada already are or will soon be packing an NFC-enabled smartphone. Analysts expect 100 million smartphones equipped with an NFC chip to be sold worldwide this year alone.
As the hardware is almost broadly available, the only remaining task before smartphone payments really take off is a deal between the carriers and credit card companies. Fortunately for mobile-payment enthusiasts, insider sources claim that such an agreement is reaching its final stages, as Canada’s tree largest carriers (Rogers, Telus, and Bell) and a number of Canadian banks are supposedly already ironing out the final details. According to Davin Robinson, head of the business team at Rogers, the biggest Canadian carrier, a mobile wallet solution is expected to arrive over the next six months.
If Reuter’s sources are to be believed, the system proposed by the carriers is fairly simple: the banks need to pay an annual fee to the carriers, and get 100% of the transaction in return. I’m guessing the annual fee will not be set in stone, as mobile payments are expected to gain even further traction over the following years.
It remains to be seen if mobile payments will take off in Canada (same for the rest of the world). As noted above, a solution might be broadly available by the end of the year. However, customers will have to actually use the new tech in order for it to become successful. It remains to be seen if customers decide that paying with their phones is more convenient than traditional payment methods such as cash and credit cards.
What are your thoughts on this? Will mobile payments actually make payments easier to make? Drop us a line in the comment section below!