Mobile payments are on the rise in Canada

Beena Parmar Mumbai | Updated on November 03, 2013 Published on October 28, 2013

Money transfers through mobile phones is picking up in a big way in the financial capital of Canada, Ontario, where the two-year old mobile payments industry is setting a new wave.

Something that amazed me on a recent visit to the state is the contact-less payment facilities that have taken shape in a big way in Canada. While Indians are hesitant to swipe their credit cards, Canadians are now getting used to tap-and-go payments.

Global payments and technology company, MasterCard ranked Canada as the second most prepared country after Singapore in the world for widespread mobile payments adoption.

On a scale of 0-100, the index score of overall readiness for mobile payments for Singapore stands at 45.6 followed by Canada at 42. India lags at 31.5, behind the global average of 33.2.

According to a MasterCard survey, the co-operation among banks, mobile networks, and the government makes Canada the leader in the Mobile Commerce Clusters score, while India has barely entered.

Also, debit and credit cards continue to take share from methods such as cheques and cash. With about one third of the total transactions done by cash, card payments has picked up in a huge way in Canada with sound financial system.

As per the survey, though India’s mobile phone penetration is at 88 per cent (as against Canada’s 80 per cent), its payment card and internet penetration stood at 2 and 8 per cent respectively.

Card Payments Rise

According to payment processing solutions provider Moneris Canada, 56 per cent of card transactions are debit and about 24 per cent are credit card.

The financial services contribute close to 50 per cent to the GDP of the country. Also, Canada has the largest card payments market with 64 per cent consumer card share spend.

Financial services scores a bit lower than average, due to the limited number of cards in circulation among Indian consumers, according to a MasterCard survey.

On the other hand, transactions through debit and credit cards in India account for one per cent and below of the total transactions. India’s total outstanding credit cards at about 18.80 million credit cards and debit cards at 35.54 million as on July end, 2013.

According to David Wai, Senior Sector Advisor at the Ontario Ministry of Economic Development, Trade and Employment, around 75 per cent of Ontario population uses credit or debit cards.

Smartphone penetration

What makes it different from India is its penetration in the Smartphone market. Canada is the third largest in Smartphone penetration at around 62 per cent (Spain - 66 per cent, UK - 64 per cent, while the US lagging at 54 per cent), and about 15 per cent are NFC-enabled, which is driving the mobile payment market in Canada.

Janet Ecker, CEO, Toronto Financial Services Alliance, said, “Already 20 per cent of smart phone users here have mobile banking apps for their phones, as compared to 15 per cent in the US.”

However, as of now, two widely used Smartphone models –Samsung S3 and Blackberry Bold 9900 are NFC-enabled.

According to Wai, “The substantial growth in the Ontario mobile payment market is supported by the presence of global financial companies, strong credit card portfolio, mobile, telecom and IT sectors.”

According to MasterCard, India’s overall readiness for mobile payments is still in the willingness stage.

To better position itself for mobile payments, India will need to focus on furthering partnerships between banks and telcos, strengthening its overall environment to be more amenable to mobile payments, and engaging with consumers to highlight the benefits mobile payments can provide in both the short and the long term.


(This trip was a Media Tour to Ontario, sponsored by the Ministry of Economic Development, Trade and Employment (MEDTE), Government of Ontario, Canada.)

Published on October 28, 2013
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