When many other countries were busy ‘talking’ about contactless and mobile payments, Canada was one step ahead of the game. In 2005, Canadian banks were issuing contactless cards to their customers and compatible terminals to merchants. At around the same time Bell Mobility, Rogers Communications and TELUS – Canada’s three main mobile network operators (MNO) – launched an initiative called EnStream to provide a common mobile commerce interface between Canada’s MNOs and the Canadian ecosystem that would facilitate near field communication (NFC) transactions.
Early adoption of contactless cards and the early inception of a mobile NFC infrastructure have provided a strong foundation for the success of mobile payments in Canada. There are, however, other factors that have contributed to its success.
1. Contactless Acceptance
Canada sits alongside Korea and Japan in having one of the most widespread and established EMV contactless acceptance infrastructures. At the same time, there has been a surge in the uptake of contactless cards by end-users enjoying the convenience and speed offered by the technology. A combination of these factors enabled banks to see the ‘value’ of mobile payments and encouraged implementation of the technology.
2. Tech Savvy Consumers
Following on from the previous point, consumers have had time to get used to the idea of contactless card payments so mobile is a logical extension. This incremental path towards mobile payments in Canada is more than five years ahead of other regions, so it is unsurprising that we are seeing a comparatively advanced marketplace.
Many observers have also attributed the quick uptake of contactless payments to the humble coffee bean. Large coffee chains using contactless terminals to speed up transaction times have allowed consumers to become increasingly familiar with the technology in a habitual environment.
3. High Smartphone Penetration
As a percentage of mobile subscribers, smartphone penetration in Canada grew by 17% in 2012 to represent a 62% market share. This high proliferation of multi-function devices and early adopters demonstrates that consumers are open to new applications and to using their mobile devices for new functions; if people do not have the technology they can’t adopt the new payment method.
4. TSM Success
Canada is a case study for the success of a naturally-established trusted service manager (TSM). EnStream reaches 95% of the market and offers a mature service enabling card issuers to store their customers’ card credentials on mobile devices, without individual banks needing to set up relationships with each mobile operator. This model has facilitated the secure and interoperable widespread roll out of mobile payments in Canada while much of the rest of the world is engaged in small-scale pilots and trials.
There are many factors that make Canada a prime location for mobile payment adoption and it will be interesting to observe and be involved in the progress over the next few years. One recent announcement saw RBC launch the country’s first cloud-based mobile payment solution, which aims to allow its customers to more safely and securely pay for purchases using their mobile devices. It is market leading developments such as this and the fact that every large issuing bank is currently pursuing mobile contactless initiatives that sets Canada apart.
For more information on Bell ID TSM implementation for BlackBerry and other projects in Canada, please contact us, or visit our website to learn more about managing multiple applications on mobile devices or secure element in the cloud.