News & Resources

Mobile payments lagged in Canada, but future growth predicted

Mar 16, 2013 Dave King

Canada has lagged behind the United States when it comes to using smartphones and tablets for bill paying and shopping with credit, debit or prepaid ACH cards. But that may be changing for the northern nation.

Approximately 22 million Canadian adults are using mobile phones and 17 percent of them made at least one mobile payment in the past year, according to a survey by Packaged Facts.

The marketing research business expects that between electronic wallets and person-to-person transactions through companies such as PayPal, the use of mobile payments by Canadians through 2015 is likely to experience a compounded annual growth rate of 62 percent.

However, unlike in the U.S., where tap-to-pay near-field communications has many proponents in the cellphone carrier community, NFC as a form of mobile payment appears to be facing some resistance from consumers and merchants alike.

Instead, Canadians have embraced P2P payments through PayPal and the ZoomPass Mobile Wallet as electronic transactions of choice. These P2P alternatives have already become popular for online shopping and are expected to continue to be the favorite of phone and tablet users as mobile payments become more prevalent in Canada, reported Packaged Facts.

Apps use growing
Another factor considered in the Packaged Facts survey was the use of quick response codes by Canadian consumers. The firm found that code awareness is low among them right now, but that Canada's shoppers are expected to be twice as likely to use a barcode scanning app this year than they were throughout 2012.

One thing that is changing the way that Canadians use mobile technology is that the industry is being directed by the American-based companies that do business in their country. For instance, the introduction of Starbucks' barcode scan-based mobile payments could stimulate interest in apps and increase their use.

In a report by Deloitte entitled, Dialing in: The future of mobile payments in Canada, the financial services firm stated that a "cumbersome web experience" that included slower speeds, smaller screens and a lack of mobile web content initially slowed Canada's acceptance of mcommerce. In addition, the future of collaborations between financial institutions and mobile network operators is difficult to predict, the report stated.

However, the proliferation of smartphones and 4G networks has improved the grasp of mobile shopping by many Canadian consumers, but remains unclear on how much that will involve NFC technology or other options.