Why Mobile Payments are Unpopular in Canada According to CIBC, RBC, MasterCard

For years now we have seen different surveys (e.g. PayPal’s) suggesting that Canadians are ready to leave their wallets at home and use their mobile phones to pay for goods and services. But what looks good on paper – or in theory – doesn’t always work in real life: Nearly three years after the launch of CIBC’s app that kick-started mobile payments in Canada, the adoption rate is very low. We can say mobile payments are unpopular in the country. Why? The Financial Post tried to find some answers.

The CIBC app started a wave of mobile payment initiatives, as carriers took advantage of the opportunity to step into the market and grab a piece of the lucrative mobile payments cake.

Apple Pay jetblue

Fast forward to today and we see Apple Pay six months old. At the same time, the number of times Canadians have used their mobile phone at a POS has been “hardly noticeable”, says Rob Cameron, chief product and marketing officer at credit and debit card processor Moneris Solutions Corp., a Toronto-based joint venture between RBC Financial Group and BMO Financial Group.

That’s a status report for every player present in the mobile payments market. TD Bank declines to offer data, CIBC says the numbers are small, while Rogers talks about tens of thousands of users registering for Suretap and tens of thousands of transactions. That compares to the roughly 2.5 million Canadians using TD’s mobile banking apps.

“There are a lot of solutions that work, but if they’re an equal or more painful way to pay than pulling a credit or debit card out of your pocket, then they’re not going to take hold,” says David Woynerowski, a partner at U.S.-based payments advisory firm First Annapolis Consulting. “It has to be frictionless.”

One possible answer could be that everyone is waiting for Apple Pay to launch.

“No one’s done the really easy, low-friction loading of cards that are acceptable everywhere that Apple Pay will bring,” said Cameron, adding that Apple hasn’t confirmed where it’ll make its platform available next. According to a recent comScore report, close to 40 per cent of smartphone users in Canada have an iPhone, which currently cannot facilitate a mobile payment in places outside the U.S. “That’s the magic when Apple brings something to market,” said Cameron. “It is a really good consumer experience.”

That could push the adoption rate forward, as it is the “frictionless” payment experience customers are probably waiting for. So, does that mean that starting from November you’re going to use your iPhone to make a purchase?