Contactless Payments to Become More Accepted in Canada

March 22, 2015

NFC technology expected to become more popular.Smartphones and tablets have become devices that Canadians use for online shopping, browsing for products and even placing orders, but the number of consumers using their gadgets to make payments in stores remains dismal. However, a recent study conducted by Technology Strategies International showed the future looks bright, revealing more than half of smartphones in Canada will be near field communications-enabled by 2017.

The incidence of in-store payments using mobile phones is very low, but with the increasing penetration of contactless payment acceptance terminals, coupled with the proliferation of NFC-enabled phones, we expect that by 2017 there will be almost 3 million regular mobile payment users in Canada." Christie Christelis, President of TSI.

Contactless payments gaining traction

Cash has been the most frequently used means of payment for Canadians since it was introduced hundreds of years ago, but that is set to end in the next five years, according to the report. Mobile payments are slowly becoming more popular as smartphones, tablets and electronic transactions become more prevalent.In fact, the study showed online payments are forecasted to grow past $40 billion by 2017, while sales of e-gift cards are also increasing. Retailers will have to adjust their strategies as they see rapid adoption of mobile solutions by consumers.

"Canadians are becoming more familiar with contactless cards as a payment option and are using it more often," Christelis said. He mentioned the awareness of contactless payment options has spiked in recent years.

Mobile wallets are the next step

While consumers in Canada are open to the idea of paying for products with their smartphones, they have yet to ditch their wallets altogether. During the Mesh13 conference, Derek Colfer, head of mobile innovation at Visa Canada, talked about how NFC payments will pave the way for the information such as the data held on a driver's license, transit pass, loyalty cards, etc. to all be stored on mobile gadgets.

He told Techvibes that once Canadians begin to wave their cards at payment terminals, there will be no difference if they used their phones for the same purpose. This will be a more gradual transition once Apple rolls out an NFC-enabled smartphone, the last carrier not to do so.

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This article is for informational purposes only and it is not intended to provide you with any personalized financial, marketing, accounting or tax advice. Neither Moneris Solutions Corporation (Moneris) nor any of its affiliates shall be loable for any direct, indirect, incidental, consequential or punitive damages arising out of use of any of the information contained in this article. Neither Moneris nor any of its affiliates warrant or make any representation regarding the use or the results of the use of the information, content and materials contained in this article in terms of their correctness, accuracy, reliability or otherwise.

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