Apple Inc. and its CEO Tim Cook made a splash this year when announcing Apple Pay at one of its well-watched keynote events that also debuted the iPhone 6 and the Apple Watch.

While Apple certainly isn’t the first to release a mobile wallet, the fact that it is now offering one is a threshold moment for mobile payments in North America. Because of the popularity of Apple’s products in both the U.S. and Canada, technology trends tend to get a kick up from early adopter stage into the mainstream when Apple gets on the bandwagon. Just take a look at tablet adoption after the iPad was released – Apple didn’t invent the tablet, yet it is credited with created this product category because the iPad was such a big seller.

Apple Pay is already available to Americans that have an iPhone 6 or iPhone 6 Plus. Since previous iPhones didn’t include a near field communications (NFC) chip, those devices aren’t compatible with the service. Apple Watch, anticipated for release in January, will also support Apple Pay. But that is still a fairly narrow subset of devices to use the service with. While a big segment of U.S. smartphone users have an iPhone, a pretty small segment has the newest model of the iPhone. It’s also hard to know how many will want to buy the Apple Watch, but you can bet that will also be a small segment of iPhone users. Overall, it’s going to take two or three years until there’s a critical mass of Apple Pay-compatible devices in the pockets of Americans.

Aside from making mobile payments cool, Apple has also done some impressive legwork integrating itself into the U.S. financial transaction framework. It has partnerships with several major banks and many major retailers will accept it. Clearly that ubiquity will go a long way to actually make Apple Pay useful.

It’s also what is lacking from the Canadian landscape. While Canada has good deployment of the same tap-to-pay POS systems needed for Apple Pay, Apple doesn’t have the same institutional partnerships here yet. In fact there’s good reason to expect that it won’t be able to arrange the same sort of deal that makes its scheme possible in the U.S.

Apple Pay is free for consumers to use – there’s no extra amount to pay on top of your purchase. It’s also comparable from a merchant standpoint to a credit card or a debit card transaction in terms of cost. So where is Apple making its money? From the banks. It’s squeezing a small margin out of the processing fee for each transaction on its platforms, likely thanks to a negotiated lower transactional fee rates.

In Canada, there’s no clear incentive for banks to negotiate a similar deal with Apple. In fact, many are pushing their own mobile apps that include the same functionality possible on Apple Pay, but with an Android or BlackBerry smartphone. Banks may prefer to try and own the mobile wallet rather than hand it over to Apple.

From Apple’s standpoint, negotiating international expansion of its digital wallet will likely come only after its proven profitable in the U.S. It will take time to establish the product there, and even after that there may be larger and more appealing markets to focus on aside from Canada.

So in 2015, don’t throw out your old bill fold just because you unwrapped a new iPhone 6 for Christmas. Just because Santa arrived, doesn’t mean Apple Pay will do the same.

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  • Manny12

    I hate our banks in Canada! They only care about their self interest, rather than the convenience of their clients. My only hope is Tangerine bank!

    • gateblues

      yes .. well Scotiabank. as Tangerine is now owned by Scotiabank… There are millions of people with Google Wallet and Apply Pay devices.. the first bank to do this will get a lot of attention.. and folks like me will be pushing the message to everyone.. Lets hope the good folks at Scotiabank are forward thinkers

      • Scotiabank are thiefs and liars. They will get nothing and like it.

        • gommer strike

          Make sure you tell that Manny12 above about your experiences with ScotiaBank. Because he seems sure that Tangerine(owned by Scotia, lol) is his last hope on this earth.

    • Just_A_Thought

      Actually, our banks are smart. Why give Apple the money when they can keep it for themselves?! There’s a reason why Canada wasn’t as hurt in the recession as America was, and it has to do with our conservative banking system. I say way to go Canadian banks! I’m all for Apple and their products but would prefer to keep it in Canada if we can.

    • gommer strike

      If you “hate” banks in Canada, it’s funny that you view Tangerine that your last hope and savior. Because guess what? Tangerine really isn’t all that different from any other bank. They simply market themselves differently and focus on self-serve(which nicely keeps their operational costs low, since they don’t have to hire bank tellers).

      Look at a big chart and sum total of what Tangerine offers and compare it directly against the other “big bad” banks. Make sure you include all the extra stuff that isn’t immediately visible. Lo and behold, where Tangerine is perceived as “cheaper”, they make up for that in other areas(but they figure that loyalists won’t do their research to know that certain offerings are in fact cheaper from their big bad competitors).

      Along with many other gotchas and fine print that they’re figuring you won’t notice. Look at their mortgage rates. Are they cheaper than the rates you can negotiate from the big bad guys? Don’t just look at the rate advertised hey.

  • Brock Smith

    There will be other mobile wallets that will be better than Crapple Pay. Manny2 Apple hasn’t invented anything, just good marketing.

  • SOB

    If there are enough Canadian customers that demand Apple Pay, then I can see it happening sooner than later.

  • Michael Bross

    “In fact, many are pushing their own mobile apps that include THE SAME functionality possible on Apple Pay, ….”

    You are either delusional or know nothing about ApplePay workflow.
    Touch ID alone, makes it way simpler than any solution on the market now.

    • I won’t claim to be entirely free of delusions, but I am also familiar with Apple Pay workflow. What I meant by saying other apps offer the same functionality is that consumers will be able to tap to pay at checkout to complete a transaction. You’re right that Touch ID is a unique feature offered by Apple that makes an added layer of security in a convenient way, and it definitely gives them an advantage in the market.

    • Dave Ings

      Agree completely. The Canadian banks experimenting with mobile payments shot themselves in the foot by partnering with a network provider like Rogers. There is simply no technical reason for the network provider to be in the loop (if the implementation is done properly) and their presence will only muck things up.

  • gateblues

    First bank to offer this in Canada has my money!

  • Dave Ings

    If precedent (with other network dependent services) is anything to go by, Apple will begin to roll this out globally 6-12 months after the iPhone 6 launch. The banks are aware of the consumer pull factor + Apple customers have good (affluent) demographics (from the bank’s point of view).

  • Fearlesstech

    I can’t wait for Apple Pay to rollout in Canada. While I love the convenience of tap-and-pay, Apple’s solution is even more secure with Touch ID. I would upgrade to iPhone 6/6+ or buy the Apple Watch just for this convenience.

  • Frederick Thatcher

    I called my bank (rbc) customer service line and they don’t even know what Apple Pay is. So not enough people are asking for it

  • Aaron K Alsop

    I would switch banks to get Apple Pay in Canada. In fact, this is the opportunity for the first Canadian bank that wakes up to support what customers ask for. “Switch to use and get our new Gold Blah Blah card — the first Apple Pay supported card in Canada!”. Simple marketing folks… statistically Apple owners are on the higher income bracket and this means associated service revenue for investments, mortgages, etc. I’m sure the multi-billion dollar revenue banks can figure out a way to give up a skinny margin to Apple to increase their consumer base of higher income bracket consumers to sell services to that make higher margins. @BMO, are you listening?!

  • Dennis Benoit

    After years in the US, we still don’t even have iTunes Radio or Beats service in Canada. Apple Pay has the potential for greater security and convenience, but don’t expect our oligarchy of banks to grant us this choice anytime soon…

    • J “DeputyDoggz” Morup

      Yes we do I have iTunes radio , no problem…I’m in Canada as well….

  • Anthony San Juan

    RBC… Time to use Apple Pay! You’ll have my money. i’ll give up my BMO for this! LOL

  • Brio

    Apple Pay IS coming to Canada by Q2 for ALL banks. It’s happening.

  • Calvin Lai

    Whelp this prediction was completely wrong.

  • J “DeputyDoggz” Morup

    Wish C.I.B.C. would bring Apple Pay to its banks…otherwise i’ll change also to any bank that will have it….

  • Patricia

    I need to contact the owner of Apple in Canada to let him know how furious i am I hate to be lied to I have purchased 3 iPhone 6’s in Brampton and I then contacted Apple and Rogers regarding the warranty Rogers stated it would be 10 a month per phone and I called apple for 2 weeks straight every rep I spoke to said the price was 99 plus tax I have the name, the date, the time and the reference number of every single rep I spoke to and I advised them I live in Canada I provided my phone number, my address and the seriel and the imei number to every rep and they knew I was located in Canada then when I called back to pay I was told it was 129 plus tax which is 150 per phone and I’m sorry that’s very upsetting it was 150 dollars more than I was prepared to spend and on top of all that I was lied to this is horrible customer service and gives Apple a bad name I would love it if the owner can contact me by email thank you

    • dsp4


  • Max tangerine

    If any of you read the article, apple pay wants to charge for every transaction, the question in canada is; will you be the first?