A report earlier this year suggested that Apple was looking to bring its Apple Pay mobile payment system to Canada sometime in the first half of the year. An announcement was to have made in March but no such event materialized. The Wall Street Journal today suggests that the launch is now planned for sometime this fall.
The report adds that the company is already negotiating with Canada’s six biggest banks and is aiming for a November launch. The new service would be compatible with both the Apple iPhone and the upcoming Apple Watch. While the banks are interested in rolling out the service, they are apparently not as interested in paying the fees proposed by Apple. In the U.S. where the program first launched, Apple Pay fees reportedly are 15 basis point per credit card transaction and half-a-cent per debit card transaction. These could be even higher in Canada with Apple reportedly looking to charge between 15 to 25 basis points on credit card transactions. Negotiations with Royal Bank of Canada,Toronto-Dominion Bank,Bank of Nova Scotia,Bank of Montreal,Canadian Imperial Bank of Commerce and National Bank of Canada are continuing.
Aware of a number of Apple Pay fraud incidents in the U.S., Canadian banks are also said to be looking to have Apple Pay support some kind of “secondary authentication” to validate customer information to enable mobile payments. This could include a PIN, logging on to a mobile banking app or using a one-time passcode sent via text message. Apple is reportedly pushing back as it would add steps to the transaction process and be detrimental to widespread adoption.
With Apple iPhones accounting for about one-third of the Canadian smartphone market and most Canadian merchants already supporting contactless payments through NFC, Apple Pay could be rapidly adopted by a substantial portion of the consumer base. Whether Apple and the banks can come to terms to enable this remains to be seen (our money is on it happening though).
Source : The Wall Street Journal