Contactless payments are quickly becoming the norm for transactions everywhere. The ease of simply tapping a card or phone to pay for goods and services is both convenient and secure. Stores no longer require customers to dutifully enter pin numbers or sign signatures – instead, a quick tap of the technology device is enough to complete the transaction. Naturally, contactless payments have changed the face of shopping as well as payment security, since they can even be used when shopping online through programs like Google Pay or Apple Pay. Overall, contactless payments are an incredibly handy method that benefits both buyers and sellers in modern-day stores and virtual outlets alike.
A recent survey from Technology Strategies International Inc., an Oakville, Ont.-based digital payments researcher, reveals just how different the Canadian payments market is in comparison to the US. There, contactless payments are the norm. Not just with mobile payment apps, but also cards, a strategy that the U.S. market never embraced and doesn’t appear to be on anyone’s product roadmap.
In its report, Canadian Payments Forecast – 2016, the firm says that contactless payments are becoming the norm, having more than doubled in the value of purchases made by consumers over 2015. That’s an increase of $30 billion over 1.2 billion transactions.
“The contactless market has evolved to the point where consumers are frustrated if the merchant doesn’t accept contactless payments,” Christie Christelis, president of Technology Strategies International, said in a statement. “A number of merchants have found it necessary to place signs on their POS terminals apologizing for the inability to accept contactless payments.”
The prevailing theory is that the prevalence of contactless will pave the way for greater adoption of mobile payment apps, which is a similar “tap and go” payment process for consumers.
Despite launching back in November 2015, Apple Pay failed to catch on as the technology was not compatible with Interac Association’s chip-and-pin contactless authentication method, leaving it with American Express as the sole backer.
This changed in May, when the Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBC) announced they would support Visa, MasterCard, and debit cards on Apple Pay, while others including the Bank of Montreal (BMO), Toronto-Dominion Bank (TD), and the Bank of Nova Scotia (Scotiabank) will add support in the coming months.
With three-quarters of smartphones in Canada having NFC by 2020, the report estimates, mobile wallets and applications will grow in adoption
Overview by Sarah Gotta, Director, Debit Advisory Service at Mercator Advisory Group
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