apple pay

Apple Pay Might Never Fully Launch in Canada

Apple Pay is one of Apple’s announcements that generated a ton of excitement. Most of us Canadians know the thrill of paying at checkout by tapping our debit or credit cards on the payment terminal. Even still, the thought of the added functionality and security that Apple could bring to payments is an enticing one.

The fact that the US has been the first blessed with Apple Pay hasn’t dissuaded us Canadians from buying into all the hype. After all, the delay between US and Canadian release dates is practically part of the Canadian ethos.

If we must wait, then for how long?

According to Jeff Martin, vice-president and CIO at TD, Apple Pay is at least a year away from coming to Canada.

Martin says that we need to recognize the differences between Canada and the US. Unlike in Canada, US banks and credit card issuers can make money from debit transactions. Plus, the majority of our banks have already built their own NFC-enabled mobile wallets. “We can do what Apple Pay does”, says Martin.

Martin is suggesting that Apple Pay will roll out first in countries that are easier to deal with. But instead of a one-year delay, we’re wondering if Apple Pay will ever really make it into Canada.

After all, Apple had some pretty serious bargaining power when negotiating partnerships and integration with US banks. American banks stood to profit from an increase in debit and credit card transactions, all the while reducing the cost of fraudulent purchases thanks to Apple Pay’s added security features.

Apple’s biggest challenge in the US has been convincing retailers to set up NFC-compatible card readers in their stores. While this is an ongoing issue, Apple Pay has launched in the US because iPhone users represented the critical mass necessary to get retailers on board.

This is where things start looking grim for Canada’s chances at our own Apple Pay launch. With so many NFC-compatible card readers already in Canadian stores, banks don’t need to rely on Apple for this. On the retail side, we already have the infrastructure in place for mobile payments.

In mid-September Apple confirmed that they are keeping the iPhone’s NFC chip closed to developers, leaving our bank’s mobile wallets out in the cold. While the NFC chip is only a feature of Apple Pay and not available for use in other apps right now, we know that the iPhone 5s also launched with Touch ID being off limits in the same way. Apple has recently let developers access the Touch ID’s thumbprint censor in their apps, so we can reasonably expect that Apple will eventually open up the NFC chip to developers too.

With the NFC chip and Touch ID enabled in their own mobile wallets, banks will be able to use Apple’s security features to protect them from fraudulent payments and offer a completely competitive product to the Canadian consumer. All without banks having to bear the burden of such a high level of integration with Apple.

Considering that Canadian banks can’t collect fees on debit and credit card transactions, there is almost no incentive for Canadian banks to enter into partnerships with Apple. Why would banks ever let Apple Pay compete when they could just own mobile payments themselves?

We suspect that our only hope is the pressure put on Canadian banks by consumers who are upset at being denied the use of Apple Pay. By using a bank’s mobile wallet, we might not notice the lack of Apple Pay in stores, but Apple Pay enables a lot more than just in-person purchases.

One of the perks of Apple Pay is that it will seamlessly integrate with apps– something especially enticing for apps like Uber or OpenTable. It’s doubtful that iOS developers will take the time to support integration with the e-wallet of a Canadian bank. That means any purchases made on our iPhones will be the same sluggish process as before. But will this be enough to cause Canadians to press our banks to play nice with Apple?

If Jeff Martin is right, we’ll be waiting at least a year to find out. But all things considered, we think Canada will be waiting a lot longer.

In November 2015, American Express became the first major service to support Apple Pay for Canadian customers. While this is a start to Apple Pay’s movement into Canada, it still leaves the major banks without any support for the service.

Think we’re onto something or totally off the mark? Let us know in the comments below.

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3 comments

  • Maury Markowitz 16 December, 2014   Reply →

    “With so many NFC-compatible card readers already in Canadian stores, banks don’t need to rely on Apple for this. On the retail side, we already have the infrastructure in place for mobile payments.”

    Sure, but that cuts both ways – the fact that we have so many NFC terminals already in place means we’re all ready for Apple Pay. In fact, people from the US who have set up their Apple Pay service on their iPhone report they work perfectly here in Canada.

    So basically all that has to happen is the banks turn it on. If they don’t, that’s solely because they want you to use their wallet software. Looking on the App Store for the three banks I use, not one of them offered NFC payments. So, frankly, Martin’s comments are odd at best.

    • Garry Swanson 29 December, 2014   Reply →

      You won’t find mobile payments in the Apple App store, because the banks only support Android and Blackberry phones..
      http://www.tdcanadatrust.com/products-services/banking/electronic-banking/ways-to-pay/mobile-payment.jsp

      In other words, Martin was saying “We’ve spent a boatload of cash making NFC payments work unless you are with Apple, so we want to prevent them from cutting in to our cash cow”

      • Orchard 20 January, 2015   Reply →

        Well, banks couldn’t exactly have made a mobile wallet for anything but Blackberrys and Androids thus far. They built out mobile wallets for other platforms because all other iPhone models never had NFC. And now that the iPhone 6 and 6 Plus actually has an NFC chip, developers are locked out of it. Our guess is that once the NFC chip is open to developers, banks will want to expand and roll out an app into the App Store.

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