CIBC and Canada’s largest telecommunications provider; Rogers Communication announced a partnership today to make digital wallets a reality for Canadians. The union would allow patrons to easily and securely use their mobile phones to make credit card payments.
The news comes on the heels of an announcement made by the collective of Canadian banks regarding a move towards mobile payments. The financial institutions came together on the matter to establish parameters and guidelines factoring in security, efficiency and ease of use. The timing is appropriate according to the Canadian Bankers Association (CBA) due to the fact that many Canadian retailers already possess the required hardware and equipment to make the payments a reality. The technology in question is known as Near Field Communication (NFC) and entails mobile devices to communicate with receivers when placed in close proximity.
According to Rogers, 300,000 current customers have NFC capable phones, the majority of which are BlackBerry devices. The number of such phones is expected to grow significantly to 750,000 by next year. These will work in concert with many of the fast food restaurants, gas stations, grocery stores, pharmacies and convenience stores that already have the necessary equipment in house for a quick swipe for payment. The NFC based payment is considered to be a more secure alternative to the current magnetic strips used on our debit and credit cards.
According to the Globe and Mail, CIBC will pay Rogers an undisclosed sum to essentially rent space on the SIM cards of mobile devices to store sensitive credit card and debit card information. This information will then be used to initiate secure and efficient payments. The costs of the agreement will not be passed to consumers and retailers, but the actual banks, which will use the capability to earn clientele.
No specific date has been given for the launch of the new service at this time, however it has been confirmed that debit cards will indeed be added to the digital wallet concept at a later time. Until we know more, we are sure that Rogers will work diligently to secure similar agreements with the remaining financial institutions. According to Roger’s VP of emerging business, they will also seek agreements with individual retailers for loyalty reward cards, gift cards et cetera. They will benefit not only monetarily, but could establish a stronghold within the domain by being the first to market.
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