This scenario sounds like something out of a futuristic movie: you are at the checkout line at a store and instead of pulling out your wallet and handing the cashier cash, you take your mobile phone out of your pocket and tap it against a console.Actually, this scene will most likely be coming to a store near you by the end of 2012. The
bank and Rogers Canada
recently announced a partnership which will allow CIBC customers with Rogers smart phones to pay with those mobile devices just as they would a credit card.
Mark Kovarski, a Toronto-based business technology analyst and ITMD peer lead, SoLoMoN, was not surprised by the CIBC/Rogers announcement. He noted that it marks the ongoing digitalization of our lives. Kovarski suggested that the CIBC and Rogers’ partnership will be more successful than if just one of the entities were to utilize the technology. According to Kovarski, the most effective mobile payment model involves the participation of credit card networks, handset manufacturers, merchants and consumers. The problem with the new CIBC and Rogers venture, Kovarski believes, is that it is not exclusive. CIBC can choose another mobile network carrier later on, and Rogers can partner with another financial institution.
Although there may be hurdles to overcome, the mobile payment era seems set to begin in Canada. Unlike other countries, in Canada, payments with your mobile phone have been virtually unheard of. David Chaudhari, managing director of the Canadian branch of payment solution provider Ingenico
, explained Canada’s delay in developing this technology as follows. “In some countries, existing infrastructure didn't support card payments, so they leapfrogged to having mobile payments. Some countries adopted cellular phones quicker than others: in Latin America, it was easier to just put up cell phone towers than to build land lines. Because Canada has card payment system in place, you have to build onto legacy technology. It doesn't have to be more expensive, but is more challenging,” Chaudhari noted.