Business Strategy: Mobile Payments at the Point of Sale in Canada — Status and Future Directions
This IDC Financial Insights report examines the current status of mobile payments in Canada and how they may evolve in the future. The report contains input obtained from interviews of 17 executives and senior managers in financial institutions, payment networks, mobile networks operators, and associations representing payment technology organizations. It also provides detailed information on mobile payment initiatives, processes, and technology that resulted from an extensive analysis of available information on mobile payments.
Predictions are made on which technologies and mobile payment participants are most likely to succeed. Factors that may inhibit the growth of mobile payments are also identified. Recommendations on approaches that mobile payment stakeholders should consider as they proceed with mobile payment implementations are included.
A review of mobile payment solutions being implemented in the United Kingdom was made as there are very few mobile payment solutions implemented in Canada at this time. This analysis provides some insight on the potential solutions that may be attempted in Canada.
Payment processes in Canada are heavily regulated. This along with the entrenched positions of the major banks results in significant barriers for new entrants. The Canadian government has stated that it will be reviewing payment processes. Some potential impacts on mobile payments resulting from this review have been identified.
It is anticipated that it will take about three years for mobile payments to reach a state of maturity where consumers become comfortable with using their mobile phones for payments at the point of sale, preferred solutions are established, and the dominant providers of payments services are identified.
"The transition to mobile payments is part of a much larger transition where the lives of individuals are becoming entwined with their mobile devices. Mobile payment providers that do not become a central part of this mobile ecosystem risk becoming an irrelevant part their clients' mobile world," says Robert Smythe, research associate, IDC Financial Insights.