The rapidly growing mobile-payment system has become a major growth driver for several telecom operators, banks and payment networks in Canada. This was primarily attributed to the massive growth of smartphones, which can be used as an electronic wallet for netbanking, credit card, insurance or brokerage account information and payment.
The Canadian mobile service sector has a lucrative growth potential as it is vastly unsaturated. Industry researchers estimated that currently just 13-15% smartphone users in Canada use their handsets for making payments.
The first credit card-based mobile payment system in Canada was established in 2012 by Canadian Imperial Bank of Commerce (CIBC) and Rogers Communications Inc. (RCI - Free Report) , country’s largest wireless and cable operator. If a CIBC customer has Rogers’ activated smartphone, then the person will be able to carry a digital wallet on his/her smartphone, through which he/she can make online payments. If a financial transaction is over $50, the customer needs to enter his personal security code, while minor transactions will be authenticated within a few seconds.
Last week, Canada's first-ever mobile-based debit card transaction was introduced by debit card service provider Interac Association in collaboration with Royal Bank of Canada (RBC - Free Report) and payment processor Moneris Solutions Corp. This transaction was completed through a BlackBerry smartphone developed by Research In Motion Ltd. . Interac stated that the main reason for introducing debit-card mobile-payment system is that Canadians use debit-card the most for executing financial transactions.
Other top-tier wireless operators in Canada, namely BCE Inc. (BCE - Free Report) and Telus Corp. (TU - Free Report) , will follow suit in the near future as both the companies are currently negotiating with several banks and financial services firms to offer mobile-payment systems.