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Mobile and Alternative Payments in Canada, 2nd Edition

Mobile and Alternative Payments in Canada, 2nd Edition

Mobile and alternative payment options are on the move in Canada, and as Canadians progressively embrace the ability to leave traditional payment instruments behind, Packaged Facts believes the opportunities are strong for wallet providers to grab consumer mindset and wallet share in Canada.

In our new report, Mobile and Alternative Payments in Canada, 2nd Edition, Packaged Facts projects that mobile payments made at the physical point of sale in Canada could hit $13 billion by 2017.

This isn’t to say that the road to widespread adoption is clear. It’s true that many new mobile and digital wallets are hitting the marketplace, which should heighten interest in mobile POS payments. But there are challenges. For example, the usage footprint of NFC contactless payments remains limited, and NFC alone cannot drive mainstream adoption. NFC-enabled phone sleeves and bar code-based payments should help to close the gap. Moving mobile payments into the mainstream also requires harnessing the mobile/digital wallet: if mobile payments are only about tapping a phone to make a payment instead of swiping a card, there’s not much room for growth. From this perspective, Canadian wallet providers are making the right moves.

Mobile & Alternative Payments in Canada, 2nd Edition provides the insights to stay abreast of this dynamic market. Report coverage includes market size and forecast for mobile POS payment value and for E-Wallet/P2P transaction value. In addition, the report explores a range of positive and negative factors influencing growth, as well as how wallet providers are positioning their solutions to consumers.

The report assesses Canadian consumer patterns in relation to:

  • Use and usage frequency of mobile banking and usage of specific mobile banking features, by demographic group
  • Use and usage frequency of mobile payments by demographic group
  • Use of a range of P2P methods, including PayPal, Interac e-Transfer, bank wire transfers, bank P2P transfers, money transfer services, and other emerging methods
  • Choice of payment at the point of sale and via the internet. As part of our point-of sale purchase analysis, we assess the degree consumers initiate payments via mobile wallets (i.e. PayPass, PayPal and Interac)
  • Use of various added-value mobile phone financial, promotional & shopping tools
Mobile & Alternative Payments in Canada also provides in-depth analysis of industry participants and their mobile payment strategies, including those employed by the card networks Interac, MasterCard, and Visa; major Canadian banks such as Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Scotiabank, and Toronto-Dominion Bank; mobile network operators, with a focus on Rogers Communications, EnStream, Blackberry, and Bango; alternative payments & emerging wallet payment providers (including PayPal, Square, Payfirma and MintChip); and QSR retailers Starbucks and Tim Hortons (with discussion of key issues to merchant adoption of mobile payments).

The report also provides a competitive overview of the Canadian payment infrastructure, payment methods, and payments laws and regulations, as well as summary analysis of payments industry competition and ongoing government-driven policy initiatives.


  • Executive Summary
    • Report Scope
      • Scope limitations
    • Report Summary
      • Market size and forecast
      • Mobile banking and payments have taken hold
      • A confluence of trends favor continued growth
      • While near-term limitations remain significant
      • Longer-term growth is assured
      • Reimaging and promoting the mobile/digital wallet
      • Canadian mobile banking trends
      • Canadian mobile payments trends
      • Point-of-sale and internet purchase methods
      • Electronic options, cash and check at the point of sale
      • Mobile payments at the point of sale
      • Mobile payments made via the internet
      • Canadian P2P usage trends
      • Canadian use of mobile financial, promotional & shopping tools
      • Mobile financial & promotional organization tools
      • Mobile shopping tools
      • Canadian mobile payments strategies: card associations
      • Interac
      • MasterCard
      • Visa
      • Canadian mobile payments strategies: banks
      • Canadian Imperial Bank of Commerce
      • Royal Bank of Canada
      • Scotiabank
      • Toronto-Dominion Bank
      • Canadian mobile payments: mobile network operator strategies
      • EnStream
      • Rogers Communications
      • Blackberry
      • Bango
      • Canadian mobile payments: alternative provider strategies
      • PayPal
      • Square
      • Payfirma
      • MintChip
      • Canadian mobile payments: retailer innovation
      • Notes from the merchant front
      • Starbucks
      • Tim Hortons
  • Canadian Payments Organization & Regulation Overview
    • Introduction
    • Canadian payments infrastructure
    • Payment methods
      • Table Canadian Payment Methods
    • Canadian payment laws
    • Payments industry undergoing significant change
      • The Task Force for the Payments System Review
      • Code of Conduct for the Credit and Debit Card Industry
    • Application to mobile payments
      • Merchant payment choice
      • Competing domestic debit applications
      • Principle of equal branding
      • Debit and credit comingling
    • CBA Mobile Payments Reference Model
    • Competition Bureau
      • Huge discrepancy between credit and debit fees
      • Challenging practices as anti-competitive
      • Competition Tribunal dismisses case against Visa and MasterCard
      • Commissioner of Competition remains watchful
      • Government picks up where Competition Tribunal leaves off
    • Adding prepaid cards to the regulatory mix
  • Market Size and Forecast
    • Summary analysis
      • A confluence of trends favor continued growth:
      • But near-term limitations remain significant:
      • But longer-term growth is assured
      • Reimaging and promoting the mobile/digital wallet:
      • But continue to represent a tiny sliver of retail payments
        • Table Canadian E-Wallet/P2P Payments Value: 2011-2016
    • Mobile payments value estimate
      • Table Canadian Adult Consumer Mobile Payments Transaction Volume, 2014
      • Table Canadian Adult Consumer Mobile POS Payments Transaction Value, 2014
      • Table Canadian Mobile POS payment value: 2014-2017
    • Migration of cash and check to electronic payments
      • Lots of checks and cash left to convert
      • But electronic and mobile developments to help put checks on the ropes
      • Taking flight
      • Online/mobile opportunity: P2P transactions skew to cash
        • Table Percentage of Consumer Transactions by Method of Payment & Payment Channel
      • Card-and phone-based opportunity: Most micropayments made in cash
        • Table Percentage of Consumer Transactions by Transaction Value Range & Method of Payment
    • Harnessing mobile phones
      • Smartphone penetration
        • Table Canadian Mobile Phone and Smartphone Users: Percentage of Population, 2014
      • Online banking highly penetrated
      • Tapping into e-commerce
      • Online orders to top $27 billion in 2014?
        • Table Canadian Electronic Commerce: Number and Value of Orders: 2010 vs. 2012
      • Card-not-present credit card transactions a growing slice of the pie
        • Table Canadian Internet Orders: Method of Payment, 2012 vs. 2012
      • Mobile is the word
      • Mobile P2P has taken hold
    • But not a slam dunk
      • A growing-but limited-NFC contactless base
      • 30% contactless share of terminals
      • Small slice of merchants
      • Large chain skew
      • Limited range of card types
      • Credit cards only, please
        • Table Canadian Mobile and Digital Wallets: Card Payment Options, by Type of Card, 2014
      • Visa has a strong grip
        • Table Canadian Bank Mobile Wallets: Visa, MasterCard & American Express Cards Issued, 2014
      • But coverage depends on carrier and phone
        • Table Canadian Bank Mobile Wallets: Carrier Acceptance, 2014
      • Seguing into QR codes
    • Reimaging the mobile wallet
      • How can you improve on swiping a card?
      • Carrot & stick: wrap behavior-changing features around payments
        • Table Canadian Mobile and Digital Wallets, by Provider and Name, 2014
      • Big steps: PayPal
      • Big steps: MasterCard
      • Banks doing it, too
    • Selling mobile to the public
      • Emphasis on ease and convenience
      • Cash replacement
      • Emphasis on security
      • Touting rewards
      • Incentives for trial
  • Canadian Mobile Banking Trends
    • Summary analysis
    • Mobile banker definition
    • Mobile bankers
      • Table Mobile Banking: Canadian Usage Penetration
    • Smartphones bring mobile banking to the mainstream
      • Table Mobile Banking Usage, by Type of Phone Used, 2012 vs. 2014
    • Mobile banking features & methods
      • Demographic analysis
      • HH income not a deal breaker
        • Table Mobile Banking Feature & Method Usage Penetration, by Age & HH Income, 2014
      • Rural opportunity
        • Table Mobile Banking Feature & Method Usage Penetration, by Province and Population Density, 2014
  • Canadian Mobile Payments Trends
    • Summary analysis
    • Mobile payment definition
    • Mobile payers
      • Table Mobile Payments: Usage Penetration, Usage in Past Month & Monthly Usage Frequency, 2014
    • Mobile payment methods
      • Table Mobile Payment Methods, by Demographic, 2014
  • Point-of-Sale and Internet Purchase Methods
    • Summary analysis
      • Electronic options, cash and check at the point of sale
      • Mobile payments at the point of sale
      • Mobile payments made via the internet
    • Purchase methods at the point of sale
      • Table Purchase Methods at the Point of Sale: Canadian vs. U.S. Consumers, 2014
      • Demographic analysis
        • Table Purchase Methods at the Point of Sale, by Demographic, 2014
    • Mobile phone purchase methods at the point of sale
      • Definitional context
      • And the survey says . . . PayPal!
        • Table Use of Mobile Purchase Methods at the Point of Sale, 2014
      • Demographic analysis
        • Table Use of Four Leading Mobile Purchase Methods at the Point of Sale, by Demographic, 2014
    • Purchase methods via the internet
      • Definitional context
      • And the survey says . . . yes, PayPal!
        • Table Purchase Methods on the Internet: Canadian vs. U.S. Consumers, 2014
      • Demographic analysis
        • Table Internet Purchase Methods, by Gender, HH Income & Population Group, 2014
        • Table Internet Purchase Methods, by Age, Population Density & Province, 2014
  • Canadian P2P Usage Trends
    • P2P methods
      • Table P2P Methods Used: Canadian vs. U.S. Consumers, 2014
    • Demographic analysis
      • Table P2P Methods Used, by Demographic, 2014
  • Canadian Use of Mobile Financial, Promotional & Shopping Tools
    • Introduction
    • Mobile financial & promotional organization tools
      • Demographic analysis
        • Table Use of Mobile Financial and Promotional Organization Tools, by Demographic, 2014
    • Mobile shopping tools
      • Demographic analysis
        • Table Use of Mobile Shopping Tools, by Demographic, 2014
  • Canadian Mobile Payments Strategies: Card Associations
    • Summary analysis
      • Interac
      • MasterCard
      • Visa
    • Interac
      • Non-profit status a boon and a bane
      • Going corporate
      • Stranglehold on debit transactions
      • Completive angle: very low fees
      • Products and services
      • Interac Online
      • Interac e-Transfer
      • Interac Flash
      • Debit in the mobile mix (barely)
    • MasterCard
      • Contactless leadership
      • Setting the mobile stage: PayPass
      • Security
      • Contactless usage footprint
      • Mobile relationships
      • MasterPass
      • And open wallet
      • Featuring shop and pay innovation
      • Bridging mobile POS payment options
      • Easy to use, ease to implement and easy to add features
      • Global expansion
      • More payment processors on board
      • In-app payment
      • Thank you, C-SAM
      • Mobile PayPass
    • Visa
      • Setting the mobile stage: Visa payWave
      • payWave skewed heavily to major chains; narrow retail segment scope
      • Secure, secure, secure
      • Mobile relationships
      • Mobile deployment in the cloud
      • Visa Checkout
      • A narrow goal, for now
      • Bridging physical and virtual; muzzling Apple
      • LoopPay: iPhone neutralizer?
      • Visa Digital Solutions
  • Canadian Mobile Payments Strategies: Banks
    • Summary analysis
      • Bank of Montreal
      • Canadian Imperial Bank of Commerce
      • Royal Bank of Canada
      • Scotiabank
      • Toronto-Dominion Bank
    • Introduction
    • Bank of Montreal
      • Mobile PayPass Tag
    • Canadian Imperial Bank of Commerce
      • Mobile banking leadership
      • CIBC Mobile Payment App
      • Incentive to use it
      • Who can use it
      • How they can use it
      • Limited uptake
    • Royal Bank of Canada
      • Mobile wallet launch
    • Scotiabank
      • Remote check deposit
      • Mobile payments app
    • Toronto-Dominion Bank
      • Personal banking reach
      • Expanding credit card business
      • And mobile banking leadership
      • TD Mobile Payment
      • On the way: Ugo
  • Canadian Mobile Payments: Mobile Network Operator Strategies
    • Summary analysis
      • EnStream
      • Rogers Communications
      • Blackberry
      • Bango
    • Carrier-Based Payment Strategies
      • Partnerships, partnerships
      • But don't each of Big Three need to be on board?
      • Is 60% good enough?
      • There's NFC capable and then there's NFC enabled
        • Table Leading Smartphone Brands, by Canadian Carrier and NFC Capability, 2014
    • EnStream provides the glue
      • If at first you don't succeed, try and try again
      • Hello, open wallet
      • Desjardins on board
    • Rogers Communications
      • suretap
      • Not a closed wallet, but not an open one, either
      • Financial institution? A credit card? A prepaid card?
      • But banks signing up
    • Blackberry
      • BBM Money
    • Bango
  • Canadian Mobile Payments: Alternative Provider Strategies
    • Summary analysis
      • PayPal
      • Square
      • Payfirma
      • MintChip
    • PayPal
      • 152 million accounts and counting
      • An ecommerce giant
      • Crossing $200 billion in payment volume
        • Table PayPal Payment Value: Total, Merchant Services and On eBay, 2011-2013
      • A very low loss rate
      • A mobile powerhouse
        • Table PayPal Mobile & International Transaction Metrics, 2013
      • Free processing
      • In Canada, the mobile payments and P2P leader
        • Table Canadians' Use of PayPal & "Runner Up": Mobile POS Payment, Internet Payment & P2P, 2014
      • Recipe for success: the PayPal digital wallet
      • Secure access
      • Simple, simple, simple
      • Smoother and quicker payments process
      • In-app payments
      • Payment agnostic, but with a plethora of out-of-house and in-house options
      • Gift cards in the mix
      • Connecting at the physical point of sale
      • PayPal Here: POS card payment solution
      • Online and mobile checkout
      • But no mobile payment app for physical POS - until now
      • Mobile check-in
      • Very limited reach-for now
      • Other value-added features
      • On the horizon
      • PayPal Beacon
      • Order Ahead & Pay At Table
      • Note on PayPal metrics
    • Square, Inc.
      • Products
      • Square Reader
      • Square Register
      • How much it costs
        • Table Square: Products and Fees in Canada, 2014
      • Credit cards and gift cards only, please
    • Payfirma
      • Cost structure and card coverage
        • Table Payfirma POS Solution Pricing, 2014
    • MintChip
  • Canadian Mobile Payments: Retailer Innovation
    • Summary analysis
      • Notes from the merchant front
      • Starbucks
      • Tim Hortons
    • Retailer perspective
      • Card not present issue
      • Can we accept mobile Interac?
      • Businesses won't like a credit card centric model, especially smaller ones
      • Starbucks Canada takes the barcode route
      • Stored value card foundation
      • Tied seamlessly to loyalty program
      • Helps breed mobile payment success
      • On deck: mobile order and pay
      • But Starbucks chooses PayPal in Canada
      • In-app payment and reload
      • But card networks not giving up
      • At Tim Hortons, NFC and barcodes join hands
      • Doubling down on dual-purpose card
      • Tim Card sets the stage
      • for "TimmyMe Pay"
      • But it's payment only
      • McDonald's helps RBC make a decision
  • Appendix
    • Methodology
      • Consumer survey methodology
      • Packaged Facts Canadian Survey Demographics
    • Market size methodology
      • Sources
    • Report table interpretation
      • Color coding
      • Indexing
      • Dollar figures in this report
    • Terms and definitions
      • Mobile wallet versus digital wallet
      • Prepaid cards versus debit cards
      • Other terms
      • Smartphone
    • Abbreviations

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