Purchasing items, paying bills, or remitting funds using your mobile phone isn’t a common practice in Canada, as it is in other parts of the world. But if mobile payments do become pervasive here, the payoff – for business and consumers – can be huge. Our Voices panel talks about this and much more.
For more than four years now teenagers in Japan have been purchasing pop drinks with their smart phones.
Even before that, African immigrants in Europe have been remitting money back home and checking on their back account with their cell phones.
In Vancouver, drivers are paying for their parking tickets with the BlackBerrys and iPhones.
A recent study by ABI Research indicates consumers worldwide will be spending more than $119 billion using their mobile phones by 2015.
Yet, in Canada, widespread adoption of mobile payment still appears distant.
For this episode of Voices, ITBusiness.ca gathered a panel of technology and e-commerce experts to discuss mobile payment in Canada – the opportunities and challenges it presents.
The panel includes: Rob Burbach, senior analyst, financial insights and buyer behaviour practice at IDC Canada; Tim Richardson, professor of e-commerce and international business at Seneca College and the University of Toronto; and Krista Napier, senior analyst, competitive intelligence and emerging technology, at IDC Canada.
Here are excerpts from the panel discussion. For the full story, please also see the accompanying video.
Nestor Arellano - Rob, perhaps you can start us off with a brief definition of what mobile payment is?
Rob -Mobile payment, in its broadest sense, means any payment made via mobile device.
We have two main kinds of mobile payments out there: First is proximity payment, where, for example, you pay at a retail location with your mobile device; the other is remote payment, where it’s not location specific but you could be paying someone on the other side of the world.
Nestor - Tim, you’ve lived for sometime in Japan. Perhaps you can tell us how other countries are using mobile payment technology, and how was brought over to Canada.
Tim - Certainly. You’d like to think that countries in Asia had a head start. But actually, as far back as 2005, media outlets — both online and in print — have been talking about how mobile banking was being developed in Africa. [The practice was then spread by] the Diaspora of people from Africa who left to find work in Northern countries.
Many European banks have been test marketing and experimenting different infrastructure circumstances in which people can use their cell phones for making payments, remittances, deposits and checking their accounts.
I just want to add that in Canada, we’re well positioned, with our experience of using debit cards. However, our American counterparts have relied on credit cards through the 1990s.
Our debit infrastructure is well established. We have an oligopoly with banks and an oligopoly with our telcos. So we have a huge opportunity to develop our mobile commerce systems because we have predominant players who are already predisposed to be interested in this.
Rob - Any one part of that mobile ecosystem — which includes the telcos, banks, payment processors, handset manufacturers — all of them will have to work together to make mobile payments a success.
Nestor - What Canadian companies are offering mobile payment as a solution?
Krista – Some very interesting emerging companies in Canada are coming to market with solutions in this space.
A good example is Verrus Mobile, based in Vancouver. If you park near a parking meter, you can now pay for your parking on your cell phone. And you can actually top up your meter. If you’re having dinner or something, it will actually send you text message that you’re low.
Municipalities really like the solution. It encourages payment. Verrus has also launched a solution for taxi cabs, so you can actually pay for your fare with your handset while you’re in the car.
Verrus has been very successful, but has been acquired as of March 4 by Pay Point a U.K. company.
There are opportunities Canadian companies in this space to be acquired.
Verrus is an example of a company that actually went overseas to the U.K. first, where they found there was better uptake, more interest in the solution. They did this before taking the solution to the U.S. and Canada.