The CIBC's mobile payment app (pictured on a Samsung device, Apple iPhones can't use this app since the technology required isn't present in their devices) is seen in this file photo.Fred Lum/The Globe and Mail
The battle for the digital wallet is taking a new turn with the launch of a mobile payments app backed by Canada's major wireless carriers and promises to include the big banks.
Bell, Rogers, Telus, Koodo and Virgin are backing suretap, an open mobile wallet that was started by Rogers Communications Inc. and spun off into a separate entity, Suretap Wallet LP, late last year.
Canadian Imperial Bank of Commerce is the first national bank to add its heft to suretap, giving customers the option of adding CIBC Visa or MasterCard credit cards to their smartphones to make so-called contactless purchases valued up to $100.
"We have additional national banks lined up that we are working with, and I anticipate some time through late summer and into December, we'll be rolling these out," said Jeppe Dorff, president of Suretap.
Interest in mobile payments, which gives customers the option of paying with their smartphones, has been rising as banks, mobile carriers and merchants respond to surging use of mobile technology for making financial transactions.
Along with Apple Inc and Google Inc., players are racing to grab a piece of what is expected to be a lucrative digital-wallet market.
Canadian banks have payment apps of their own. But in joining suretap, CIBC has given consumers the option of using another app in addition to its own wallet.
"We want to enable client choice," said Todd Roberts, senior vice-president, of cards and payments innovation, at CIBC. "We think it's going to be a good additional means for clients to transact."
Apple rolled out its Apple Watch recently and has begun to expand its own Apple Pay mobile payments system beyond the U.S. market, adding to the urgency for other players to build their own market share.
"For mobile payments to take off in the way that everyone has wanted, it's very important that there is a single wallet, with all the content available to all Canadians," Suretap's Mr. Dorff said.
"Having a unified, single place to store all your credentials is quite unique," he said.
Suretap, which he said will soon include debit, gift cards, loyalty cards and digital coupons, comes in advance of Apple rolling out its Apple Pay mobile payment system in Canada. Launched south of the border last year, Apple Pay is expected to arrive in Canada later this year, putting pressure on rivals by turning the iPhone into a virtual credit card almost effortlessly for its users.
Despite an array of different digital wallets on the market, they have yet to be widely adopted as companies look for ways to ensure their systems are secure and easy to use with a wide swath of different participating players.
"It's confusing for the consumer," said Robert Smythe, a mobile payments specialist at tech researcher IDC. "It's even confusing for us because every day there is something new coming out."
The systems usually need consumers to have a smartphone that is enabled with Near Field Communication (NFC) technology, which exists in most new devices.
Canada is seen as ripe territory for mobile payment adoption because consumers are technologically savvy, with about 76 per cent of them (age 5 to 90) having a smartphone in 2014 and 80 per cent expected this year and 86 per cent in 2019, according to IDC. And 60 per cent of smartphones shipped in Canada had NFC capability last year, IDC data shows.
Retailers in Canada are more prepared for contactless payments, Suretap's research suggests: About 35 per cent of retailers in Canada have contactless payment terminals, allowing NFC-enabled digital wallets to be scanned, compared with just 2 per cent of them in the United States, it found.
But IDC's Mr. Smythe said Apple and Google, which plans to offer Android Pay south of the border this year, also will be intent on signing up smartphone users when they introduce their respective mobile wallets in Canada.
The stakes are high: U.S. digital payments are forecast to soar to $142-billion (U.S.) by 2019, almost three times more than the $52-billion last year, according to tech specialist Forrester Research Inc.
Mr. Dorff said Suretap has signed on about 30 retailers, including cheap-chic fashion chain Forever 21 and online coupon purveyor Groupon, twice as many as it had when it was part of Rogers. Other retailers include Indigo Book & Music Inc., restaurateur Cara Operations Ltd. and movie chain Cineplex Inc.
Mr. Dorff, a former Rogers executive, said initially suretap is launching with CIBC and Rogers bank, which together have about 40 payment cards, but "in the near future" more banks will make their card products available to consumers. "We are certainly setting the pace in terms of mass, scalable solutions."
Forrester analyst Thomas Husson said in a report that mobile wallets will become important marketing tools for companies in the next five years. Marketers can boost sales by folding in loyalty points, coupons and product offerings from multiple brands in a convenient mobile wallet, the report said.
David Berman