OTTAWA – The nearly 10-year effort to get mobile payments into the mainstream may soon becoming to fruition, according to David Robinson, VP of emerging business at Rogers Communications.
The Big Three Canadian wireless carriers, and their mobile payments enterprise EnStream LP, are putting the finishing touches on a contactless payment system that will enable consumers to embed all types of payment cards and other identification – referred to as credentials – on their smartphones. Robinson refers to the system as mobile proximity payments rather than contactless but both are applicable.
“We are ready to own the podium [on mobile payments], we just have a few links in the chain that have to be completed to make it happen,“ he said during a presentation at the Canadian Wireless Telecommunications Association’s Wireless Showcase event in Ottawa on Tuesday. “The infrastructure should be in place this year and we should be in the market mid-next year.”
For years, the wireless companies believed they had found the sweet spot for mobile payments. But after years of working through the various machinations of mobile payments, it was determined that EnStream would help create the mobile wallet.
In essence, everything that is contained in the traditional, physical wallet would be transferred onto a smartphone.
“We’re talking about making the smartphone look like a credit card, payment card or (another type of credential),“ Robinson explained, adding that the phone has to work in areas where mobile networks aren’t available.
The missing component was the ability to upload (or ‘onboard’ as Robinson described it) the various payment cards and other credentials such as loyalty, transit and library cards. Two other critical pieces were also required. All stakeholders – payment networks, card issuers and merchants – had to see their value enhanced and the needs of consumers had to be put first.
“So in a nutshell what we’re trying to do with EnStream is this: anything that’s contained in a physical wallet gets on the phone somehow,“ Robinson said, noting that while this is largely about payments, it’s not focused on payments. It can accommodate a variety of credentials even the smallest.
“If you can meet the bar which is very, very high for a payment card, then you can do a transit card, a library card, coupon or any other credential, any other currency,” Robinson said. “If a library in rural Manitoba wants to issue an access control credential and doesn’t have the infrastructure… and all the technology, they’ll be able to go to Enstream and ask can you help me get my library card onto all these mobile phones? The answer is yes.”
Robinson is confident that the mobile wallet will be a hit with consumers. He even noted that some marketing research suggests that upwards of 40% of Canadians would use their smartphone for mobile payments.
The Rogers executive said that by 2012, 20% of Canadian smartphone users will have a device that supports mobile payments, and by 2014, “a mass majority” of Canadians will hold smartphones with contact less payment capabilities.
Interac changes game for merchants
Retailers have in the past expressed some opposition to the implementation of contactless payments. But Robinson noted that this resistance should abate now that Interac is going to adopt a contactless option. In fact, he said that this may actually increase merchant adoption of mobile contactless payments.
With traditional Interac debit transactions well below the maximum $50 allowed for contact less payments, combining the two makes sense, said Robinson.
“Interac debit and contact less are a superb fit,” he added. “So I believe the combination of Interac debit…will also accelerate acceptance in the merchant community.”
