As Canada's banks prepare to unveil a new system that allows consumers to use their cellphones in place of credit and debit cards, the banking sector insists there will be no added fees.
In releasing a series of guidelines that will oversee the world of mobile payments, the Canadian Bankers Association said Monday the new technology will not come with added costs.
"In terms of charges, there will be no additional fees to consumers and merchants," said association spokesman Robin Walsh.
The new guidelines pave the way for banks and telecommunications companies to begin striking deals to offer payments through phones, and make it possible to store credit card and debit card information on the SIM cards inside smartphones. The banks will pay the wireless companies for space on the SIM cards.
Dan Kelly, senior vice-president of legislative affairs for the Canadian Federation of Independent Business, said merchants are still concerned it will come at a cost. "Small business owners will be bracing themselves for the possibility of another fee grab on the part of banks, credit card companies and newer market entrants," he said in statement.
Security is a key concern about the new guidelines, in terms of both fraud and data collection.
To make a purchase, consumers will wave their phone in front of a receiver near a cash register. For large purchases, a personal security number would need to be entered on the phone, but for smaller purchases, such as bus fare or buying a coffee, no security code is needed.
"In order for this capability – mobile commerce – to get adoption, individuals are going to have to feel as though it is safe and secure," said Stephen Gardiner, managing director at consulting firm Accenture.