Tag: mobile payments canada

Canadians are slow to embrace mobile payments

Mobile commerce is experiencing lackluster growth throughout Canada

Mobile payments may experience lackluster growth in Canada. A new study from GfK, a global market research firm, shows that Canadians are somewhat apprehensive when it comes to using a smartphone to make a payment. While Canadians have developed a reputation for being early adopters of new technology, they are not convinced that mobile commerce is a good solution for shopping or as secure as it should be. Notably, security is one of the biggest issues that consumers in Canada are concerned about.

Study shows that security concerns are a major issue for Canadians interested in mobile commerce

According to the GfK study, Canadians consider security to be a major issue when it comes to mobile payments. Many mobile commerce services have become available in Canada, but relatively few of them have proven that they are capable of ensuring the safety of consumer financial information. Some high-profile cyber attacks in the United States and Canada have also called into question whether or not mobile commerce services are safe.

Canadian consumers are more interested in traditional forms of commerce due to extensive experience and the availability of familiar services

Canada Mobile Payments - slow adoptionThe study also notes that Canadians may not be interested in mobile payments because they already have plenty of ways to pay for products in stores. ATM transactions are significantly larger in Canada than they are elsewhere and the country’s ATM and debit card structure is well designed to meet the needs of consumers. In order for mobile commerce to grow in Canada, consumers would have to train themselves in new ways to purchase products and break old habits concerning physical currencies and payment cards.

Retailers are revising their mobile focus and putting more effort on providing consumers with convenient services

Some large retail organizations have been making moves to establish a foothold in the mobile commerce space, but have found relatively little support among consumers. As such, retailers have begun to pull back their mobile initiatives, focusing more on traditional forms of commerce and giving consumers access to services they may be more comfortable with.

Mobile payments may be in for some turbulence in Canada

New legislation could allow merchants to charge a fee on all mobile transactions

New legislation in Canada could cause some turbulence in the mobile commerce space. Some of the country’s lawmakers have introduced legislation that would allow Canada’s merchants to institute a surcharge on customers paying for products from a mobile device. Having to pay additional fees may make mobile commerce somewhat less popular among consumers, but merchants have been having to deal with these fees for some time.

Payment services are proving to be a costly investment for merchants

Organizations that offer mobile payment services, such as Visa and MasterCard, also charge a fee for the merchants that use these services. Generally, merchants pay approximately 2.5% per transaction made through a payment platform. Many merchants have avoided embracing mobile payments because of these fees, while others have seen little issue with the practice. In the case of Visa and MasterCard, the two companies have begun lowering the fees on transactions in order to make mobile payment services more popular among smaller merchants.

Surcharges on mobile transactions could help merchants become more financially stable

Canada Mobile PaymentsPer the new legislation, merchants may be able to offset the financial impact of high interchange fees by imposing fees of their own. Many merchants see mobile commerce as a costly investment and becoming involved in this space has proven to be quite expensive. By imposing fees on mobile transactions, retailers may be able to see some financial gain from their mobile initiatives. Additional fees may not be popular among consumers, however, who may look for merchants that do not charge for mobile transactions rather than support those that do.

Merchants may be unlikely to charge for mobile transactions until they can no longer handle other costs

While many merchants have expressed concerns over the financial aspects of mobile commerce, relatively few of them are likely to begin charging for mobile transactions. When a high profile platform, such as Apple Pay, arrives in Canada, however, merchants may change their minds regarding the matter. Such a platform introduces more complexity to the commerce space and has the potential to raise costs for merchants, which will need to be offset for the sake of financial survivability.