Last week CIBC and Rogers unveiled their new NFC mobile payment solution (known as Rogers suretap), a combination of an NFC-SIM tied to your CIBC VISA or MasterCard credit card account for transactions. Both companies claimed it was the first mobile credit card transaction in Canada.
PayPal wrote to us and explained they weren’t amazed by the CIBC/Rogers announcement as they’ve been allowing users to pay with PayPal via various outlets in the country:
Last week, CIBC and Rogers announced they had completed the first mobile credit card transaction in Canada. This came as quite a surprise to everyone here at PayPal. Canadians have been able to use PayPal to pay directly from their smartphones for items like lattes at Starbucks and movie tickets at Cineplex since earlier this year. And as I’m sure you know, PayPal accounts can be linked securely to a credit card.
They got on to explain a mobile wallet is limited when compared to a digital wallet, calling NFC payments “far from the Holy Grail for mobile payments,” and directed us to this article by Darrell MacMullin, their Managing Director.
He explains why NFC does not equal mobile payments in his article titled “The iPhone 5 doesn’t have NFC–so what?”:
NFC-based mobile wallets don’t allow consumers to access their money anywhere they can access the Internet. It only allows them to pay with the phone (as long as it is a Blackberry or Android phone). With five million iPhone 5s selling in the first 72 hours of its availability, this will leave a lot of Canadians out of the equation.
NFC-based mobile wallets may also force many merchants to invest in new terminals, which is not something many Canadian retailers will want to do anytime soon. Even if their terminals accept NFC today, many of these terminals do little more than just transmit the card number and transaction size. They’re not equipped to automatically accept the complex coupons and offers that make the digital wallet so exciting – for merchants and their customers. I predict that many will wisely want to take a wait-and-see approach to see if Canadians start pulling out their phones en masse to pay before ripping out and replacing their existing technology. With limited merchant adoption, few NFC enabled handsets, and no ability to offer a true digital wallet experience – I’m not sure how many Canadians will understand the benefit of pulling out their phone instead of their plastic card at point of sale.
What do you think of PayPal’s argument of comparing NFC-based mobile wallets versus their digital wallet solution?