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A customer uses an Apple Inc. iPhone to pay via the Apple Pay system, from their Nationwide account, at the check-out till in London, U.K., July 14, 2015.Chris Ratcliffe/Bloomberg

When Apple Inc. first elbowed its way into Canada's mobile payment market in late 2015, it seemed the technology behemoth was reshaping the bond between consumers and financial institutions.

But consumers appear to be adopting mobile payments more slowly than expected.

Apple Pay – which lets users upload credit and debit cards to their iPhones and tap the devices to make purchases of $100 or less – and rival apps from Samsung Electronics Co. Ltd. and Google Inc. have been expanding their reach in Canada. By June of 2016, the five largest banks had all embraced Apple Pay. Despite the initial fanfare around its arrival, take up of the app appears muted so far.

"If I had to guess, I would say the penetration is probably not where Apple might have expected it to be – it isn't globally, it isn't in the U.S. and it isn't in Canada," said Cameron Fowler, group head of Canadian personal and commercial banking at Bank of Montreal, in an interview last week. "But my expectation is it grows," he added, and the roll-out is "going fine."

A spokesperson for Apple declined to discuss the app's use in Canada, but said "tens of millions" of people in 13 countries are using Apple Pay, while the volume of transactions through the app has multiplied by more than five times in the last year.

Smaller financial-technology startups are fighting to grab a share of the payments market, but should Silicon Valley heavyweights such as Apple, Google and Facebook choose to act more often as financial intermediaries, it could pose an even greater threat to established banks.

Even so, the banks know they can't afford to be left out. "It's one that you need to have as an offering," Mr. Fowler said of Apple Pay. BMO has also launched Samsung Pay and Android Pay through its American arm, BMO Harris Bank, and expects to bring them to Canada.

Canadian banks agreed to a steep price on Apple Pay transactions of 15 cents per $100 for credit-card purchases and four cents for debit cards – which is roughly in line with the deals U.S. banks negotiated, as The Globe and Mail reported last May, citing sources familiar with the matter.

The decision to join up with Apple or Samsung "goes back to basic economics: Price times volume," said Robert Vokes, managing director of financial services for Accenture in Canada. By making small purchases easier, banks are betting they will get a bump in the volume of transactions, which yield data about customers, even if tech companies take a cut. "And that's the tradeoff everybody's going to make."

At Canadian Imperial Bank of Commerce, which offers both Apple Pay and Samsung Pay, senior vice-president of innovation Todd Roberts wouldn't say how many clients use them, but the number is still dwarfed by those who tap plastic credit and debit cards at payment terminals.

"The Apple loyalists and the Samsung loyalists were very quick to adopt, and we've seen very solid, persistent usage of the payment apps," he said, but the bank never saw mobile payments as a replacement for plastic cards. "We view this technology as a complement."

Contactless payments through Moneris Solutions Corp., Canada's largest payment processor, increased by about 74 per cent from a year earlier, accounting for more than 35 per cent of all transactions. But that figure includes the use of physical cards as well as smartphone taps.

A recent survey by consulting firm Accenture PLC found that only 13 per cent of smartphone users pay with their phones at merchant locations at least once weekly.

Bank of Nova Scotia is "pleased" with the uptake of these apps so far, a spokesperson said in an e-mail. As mobile wallets evolve, "we expect adoption will dramatically accelerate."

Large retailers such as Canadian Tire, Chapters, Petro-Canada and Tim Hortons also accept Apple Pay, but some have built their own apps that compete on convenience. Starbucks has a popular cashless-payment app that awards loyalty points which add up to free coffee – a perk not offered by Apple and its peers.

As mobile payments continue to move into the mainstream, users can expect to see more offers and rewards based on their purchase histories to keep them tapping.

"It's absolutely an evolving industry," said Mr. Roberts, of CIBC. "We're in the first chapter of a very long book."