Royal Bank of Canada has been granted a patent on its mobile payments technology by the U.S. Patent Office, giving customers the ability to make small purchases using their smartphones on any network and ramping up the effectiveness of RBC Wallet ahead of the launch of Apple Pay in Canada.
"When we first started, it was a limited release for certain Android phones on Bell. Now, it will work on all Android devices and all telcos," said Linda Mantia, executive vice-president of digital, payments and cards at RBC.
Mobile payments technology has emerged as a key battleground among banks and technology companies as consumers show a keen interest in using their smartphones as wallets. According to Gartner Inc., the technology research firm, usage should rise at an annual pace of 30 per cent over the next few years, as the value of transactions exceeds $720-billion (U.S.) by 2017 globally.
Google Wallet and Apple Pay have popularized mobile payments in the United States, and a number of Canadian banks have been developing their own approaches to mobile-payments technology ahead of expansion into Canada, ideally heading off what some observers believe is a potential competitive threat to incumbent banks. Still, Ms. Mantia noted that these are early days for anyone hoping to ditch their wallets in favour of smartphones, as RBC takes a low-key approach to its mobile payments, focusing on the security of its technology. "We haven't even done a press release. Clients are finding it or stumbling on it," she said, declining any figures showing the number of RBC customers using the payment app.
Indeed, she likened mobile payments to the initial rollout of the fax machine, which was useful only if both parties had the technology.
In the case of mobile payments, ubiquitous use by consumers has been held back by, in some cases, a limited number of suitable merchant terminals or reluctant shoppers, but it should rise as the technology becomes widely available on all devices.
Some observers believe that Apple Pay will launch in Canada this year, after a launch in Britain in the summer allowed consumers with iPhones to make purchases valued up to £20 ($40 Canadian) (since raised to £30).