Angela Brown is president and CEO of Moneris.
It's been a long time coming, but Canada is finally ready for the mobile payments revolution. The prolonged wait has had less to do with the viability of the technology, but rather, the absence of the right ingredients for adoption.
Consumer preference, merchant readiness and industry fragmentation were among the factors preventing mobile payments from really taking off. But we have made more progress toward mobile payments adoption in the past year than throughout our entire history with the technology.
Experience has taught us that when it comes to payments, consumers are more likely to adopt new technology once it can be used for everyday spending. In the 1970s, consumers used cash and cheques for almost everything with the exception of large items such as furniture and appliances.
It wasn't until the 1980s, when drugstores and grocery stores began accepting plastic, that Canadians were introduced to the idea of paying for routine items with their credit and debit cards. And now, with the arrival of mobile payment apps and wallets, we see the next technology wave enter the everyday spend category.
Mobile wallets give consumers a better payment experience for everyday purchases. By eliminating the need to share personal identification numbers (PINs) or provide signatures, mobile wallets increase the security of the consumer. They also offer consumers a convenient view of their data so that they can track receipts and expenses more easily.
Contactless "tap and pay" enablement, which is at the core of the technology's speed and convenience, has been a familiar part of the checkout routine in Canada ever since contactless cards were introduced in 2006.
The accelerating adoption of mobile payments is also due to the growing number of retailers and other businesses making mobile wallet acceptance and in-app payments available to their customers. In the physical world, the majority of today's retailers carry terminals that accept tap payments via a card or smartphone. Online retailers are increasingly accepting mobile wallet payments as a way of speeding up the checkout process.
The final piece on the road to adoption of mobile technology has rested with the evolution of the infrastructure to support it, as provided by the card networks, banks, telecommunications providers and smartphone manufacturers. In the early days of mobile payments, a perfect combination of the right phone, carrier app, payment brand and bank issuer was elusive. It has taken time for these players to create solutions that work for the consumer. There is certainly more work to do on this front, but attractive, viable options have emerged and will continue to improve.
The ubiquity of smartphones today has made this task even easier. Close to 70 per cent of Canadians reported owning a smartphone in 2015 – a number that has presumably gone up in 2016. Apple iOS and Google Android, the two leading mobile operating platforms in Canada, both support wallet applications. This means that all new-generation smartphones in use in Canada today are equipped with the technology to make mobile payments.
Canada took another step forward this past spring, when support for Apple Pay was expanded to customers of all major Canadian banks. While Apple's mobile wallet service brings the promise of mainstream adoption even closer, this will not be the tipping point alone. Android Pay, Samsung Pay and other wallet providers will ultimately occupy their fair share of the mobile wallets market.
Our recent experience with mobile payments has taught us how quickly the adoption landscape can change once all of the right elements are in place. As an industry, we can help spur the adoption of new payment technologies by creating environments in which they are accessible and practical for use.
So what comes next? The timing of our next payments revolution remains to be seen, but whether it's an eye scan or new digital currency, the payments landscape will continue to evolve.