2012.07 | Mobile Payments in Canada

A few options for mobile payments that have come to my attention as of late:

Verifone PaywareVerifone will soon be releasing a pinpad solution for iPhones in Canada that allows for EMV (also known as chip and pin) enabled payment acceptance.  A peripheral attached to the iPhone allows for the card to be inserted and a pin entered on the back of the peripheral.  This effectively provides a completely portable wireless (via wifi or cellular data) payment unit to business owners in Canada.  While not necessarily a device that larger retailers will want to use initially, it certainly lays the groundwork for change to the current industry model where countertop devices are connected via internet or a phone line and enables a whole range of small business owners to take payments wherever they do business with a device they already have on hand.

It’s the right move by Verifone – effectively giving the masses what they want.  I have had the question from numerous non-traditional small business owners of how they can accept electronic payments, and this is one potential answer.

I think it’s a great idea, but see challenges for retailers who already have issues with security.  There is also the challenge of charging – hopefully these devices have a USB pass-through charging cable that avoids the challenge of a small retailer forgetting to charge their iPhone.  No matter the challenges, this is a solution that needs to be there.   The use cases and issues will be worked out over time.

Interac e-Transfer – While most Canadians aren’t aware of it, Interac has been providing financial institutions the opportunity to enable Interac e-Transfer – effectively a slightly updated debit transaction – for some time.  It allows for individuals to transfer funds to other individuals without knowing their bank account information – the key barrier for most people transferring funds from person to person.  I’ve used this solution a few times via my bank both on my PC and on my mobile.

Users establish a payee on a list and set up a personal question that they have to answer.  An email or text message with a link is sent to the payee.  The payees then follow the link to enter their banking information and complete the transfer.  While this is a fully functional and usable system, it is not terribly convenient using my present service provider.  Payees for my bank have to be established on a PC and not on the mobile device – though once they are established, they can be selected form a list.  If it is not possible to establish a user on a mobile, few people will go for it.  Why not allow users to pick from the address book?  Probably fear of security holes.  Looks the Barclays in the UK is trying the same with Pingit, and I’m sure there are other offerings I have not heard about.

Google Wallet – Google Wallet continues to stumble along.  You can only get it in the US on a Nexus S through a single carrier, and now there are concerns two different hacking issues.  Yikes.  Wonder why it might be delayed in Canada?  Here’s hoping it gets flushed out, though I continue to wonder if NFC may not be doomed from a business perspective.  It’s fine technology, but there are always too many players who want their slice of the pie, or want to keep others out when payments come into the picture.

The End of Money – On the subject of electronic payments, I recently listened to a podcast with David Wolman, author of the newly released book “The End of Money“.  As a proponent of  a cashless society, I was intrigued by his discussion of the hidden costs of currency – costs of which I’m very much aware – and have picked up the book.  I’m looking forward to reading it, and you may want to pick up a copy as well.

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