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Canadian mobile payments market growing thanks in large part to PayPal and Zoompass

Industry Sector

Finance and Banking

Published

7 January 2013

Author

Mike King

Type of News

Market

Although Canada is an established leader in payments technology, it is relatively immature when it comes to mobile payments.

While mobile-payment penetration in Canada remains low, a change appears to be on the horizon. Mobile payments may soon become a reality in Canada - card networks are promoting contactless payments, financial institutions and mobile-network operators are actively pursuing mobile payments pilots and mobile technology is rapidly evolving.

According to recent research, of an estimated 22 million Canadian adult mobile phone users, some 17% have made a mobile payment in past 12 months.

Canadians continue to adopt mobile technology and demand for mobile payments capability continues to grow. As a result, in May 2012 the banking industry and credit union system announced a set of voluntary, secure, open guidelines for the development of mobile payments at the point-of-sale in Canada.

Mobile P2P has already taken hold, and is expected to continue to lead Canadian mobile payments growth, thanks in large part to PayPal and Zoompass, already popular P2P methods straddling online and mobile payments.

While QR code awareness is low, recent research suggests that mobile payers are more likely to use a barcode scanning app during the next 12 months than during the last 12 months. And with Starbucks' Canadian rollout of its barcode scan-based mobile payment application, usage -- and interest -- could rise.

Both the Telecom and Technology sectors were somewhat more bullish on the pace of change than other sectors, with 86% of technology respondents and 88% of telecom respondents asserting widespread adoption in the next four years, as compared to 83% on average.

Interestingly, while all other sectors cited security as the biggest challenge facing the development of mobile payments, the telecom sector seemed more concerned about technology and adoption challenges.

The future looks bright for the Canadian mobile payments market, having been predicted to increase at a compound annual growth rate of 62% during 2012-2015, on the heels of recent and expected mobile payments launches and subsequent consumer uptake.

For more information on the Canadian mobile payments market, see the latest research: Candian Mobile Payments Market

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