Rogers and CIBC first to launch ‘mobile wallets’ in Canada

 

TORONTO • A joint venture between Rogers Communications Inc. and the Canadian Imperial Bank of Commerce to turn smartphones into wallets capable of making day-to-day transactions with the swipe of a device represents the tip of the iceberg in a burgeoning mobile payments market, executives from both companies say.
The country’s fifth-largest bank and its biggest wireless carrier said Tuesday each is looking to partner with additional players in the nascent space.
“It will scale from here,” David Williamson, CIBC’s senior vice-president of retail and business banking said in an interview following a press conference at the bank’s Toronto headquarters.

Importantly, the partnership hinges on a new standards framework the Canadian Bankers Association announced Monday that clears many of the security and logistical obstacles that have held back the deployment of a so-called “mobile wallet” for years.

With the concerns resolved, CIBC and Rogers — alongside credit-card issuers Mastercard and Visa Canada — will enable smartphone devices to act as a physical CIBC credit card and pay for groceries, gas, restaurant bills and other small ticket items by the end of the year.
Mr. Williamson said this is the first such deal to develop from the code, which had been in the works for months. While the bank is firmly focused on its partnership with Rogers, Mr. Williamson would not rule out working with competing mobile providers, such as BCE’s Bell Mobility and Telus Corp.
“At this time it would be fair to say we would like to bring this to others,” the executive said.
A spokeswoman for Telus, the country’s third-largest carrier, said talks are taking place between it and financial institutions. “We are currently working with a number of banks to offer this service in the near future,” spokeswoman Elisabeth Naplano said via email.

Requests for comment from Bell was not immediately returned.

The new opportunity for both financial institutions and wireless providers is based on near-field communications (NFC) technology, which sends data such as a person’s card “credentials” over very short distances. In this instance, the data housed on a Rogers phone would be received by a small terminal near a traditional cash register.
Credit card companies, which have been fast to roll out mobile payment solutions of their own using their own cards, are logical partners because of their extensive “tap and go” networks already in place with merchants country wide, as well the loyalty and rewards programs they offer through their bank-sponsored cards, bank executives said.
Rogers will charge a flat-rate “rent” for a customer’s CIBC credentials to be stored on their SIM card, the small, removable chip that acts as a digital repositories for wireless usage, numbers, contact information and other personal data.
Rob Bruce, president of Rogers wireless and wireline operations, said roughly 300,000 customers have phones equipped with NFC technology in the market now, with the goal to have three-quarters of a million devices in use by the end of the year without specifying how many are CIBC credit-card holders and therefore eligible for the solution.
In an interview, the executive said it was “premature” to speculate on what other financial institutions Rogers may partner with, but he said the company is working aggressively to broaden the program. “We’re in very good shape,” he said.
While wireless credit and payment models have been in place for some time in emerging economies that lack large-scale banking infrastructure, there are only two other commercial NFC deployments like the one announced Tuesday in the world, Mr. Bruce said — underscoring the leap in innovation both CIBC and Rogers are taking. The first is from Telefónica SA of Spain while a second venture has been launched by a South Korean carrier.
The sole handset partner supporting the CIBC-Rogers NFC solution to date is BlackBerry maker Research In Motion Ltd. Apple Inc.’s iPhone currently has no plans to bring on NFC technology, a blow to consumer adoption perhaps but boon to rival smartphone makers.
Mr. Bruce said a “robust” roadmap is now in development for devices using Google’s Android platform.

Posted in: Financial Services News, FP Tech Desk  Tags: CIBC, Mobile, mobile payments, Rogers