Canada’s six-largest lenders including Royal Bank of Canada (RY), the biggest bank, as well as Credit Union Central of Canada and Desjardins Financial Group agreed to voluntary guidelines to develop mobile payments at retail outlets across the country, the Canadian Bankers Association said today in a statement.
“The goal is to ensure safety, security and ease of use for merchants and consumers,” the association said.
Consumers worldwide will spend about $50 billion using their mobile phones through near field communication by 2014, Juniper Research said in a 2011 report. Canadian banks and technology firms are racing to catch up to Europe and the U.S. where wireless operators began earlier to invest more in technology that allows people to pay for a bus or movie ticket by swiping a mobile device across a scanner.
Google Inc. (GOOG) introduced its Google Wallet payment system across the U.S. last year, and Nokia Oyj (NOK1V) and its software partner Microsoft Corp. (MSFT) are also building functionality into phones sold through their partnership.
Canada risks falling behind other countries in competitiveness unless it adopts a “modern” digital payments system that allows consumers to pay with mobile devices, according to a December report from a task force set up by Finance Minister Jim Flaherty.
Payments Task Force
Canadian banks dominate the current system, preventing new entrants from bringing innovations to market, the task force found. It recommends the federal government introduce legislation to “define a discrete payments industry” and create a public oversight body to monitor it.
Financial services firms in Canada have already been experimenting with various electronic payment systems. Bank of Montreal in September introduced its Mobile PayPass Tag, allowing its MasterCard users to make purchases through a sticker affixed to their mobile phone.
Research In Motion Ltd. (RIM), the Waterloo, Ontario-based BlackBerry maker, is among handset makers introducing Near Field Communication technology, also known as NFC, into its latest models to allow wireless payments by swiping the device across a scanner.