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Apple Pay day in Canada faces some obstacles

Apple Pay day in Canada faces some obstacles 

iPhone users in Canada can now start using their smartphones to pay for purchases with the use of Apple’s one-year-old mobile payment service. Consumers in the United Kingdom also get the service today while Australians have to wait until Thursday.

Apple ups the ante in the mobile retail race as Apple Pay’s release in Canada come only a few months after Google launched Android Pay, the search engine’s own tap-and-pay service. Samsung also has its own service called Samsung Pay.

Samsung Pay and Android Pay are available to Android phones while Apple Pay works with iOS devices.

Americans got a head start. Apple Pay was available to them back in October 2014 where the service now accepts Visa, MasterCard, American Express and Discover card. Retail brands south of the border like Disney, Foot Locker, Subway, McDonald’s and even Uber has been using Apple Pay.

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Apple Pay is supported on the iPhone 6 and the iPhone 6S. The service is also available on the older iPhone 5 in conjunction with the Apple Watch. The service is also compatible with iPad Pro, iPad Air 2, iPad mini 3 and iPad mini 4.

The Apple Web site says there are more than one million stores accepting Apple Pay.

Mobile payment hurdles

However, Canadian retailers seeking to get on the Apple-based mobile commerce bandwagon are likely to encounter some hurdles.

For mobile payment systems to gain momentum, service providers need to have more tap payment machines available in both small and large retail stores.

For instance, in the United States, there were around 200,000 tap-enabled machines last year.

That number is expected to grow to 1.5 million this year, but it still leaves several millions of retailers operating with older machines.

In Canada, tap-to-pay appears to be more readily available in gas stations, coffee shops, restaurants and some retail chains.

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However, more retailers need to upgrade their existing systems to accept mobile payment services from different providers in order for mobile retail commerce to really gain traction.

News of Apple Pay’s introduction came by way of American Express which admitted to journalists that the service was available in Canada beginning Nov. 17.

Jennifer Bailey, vice-president for Apple Pay, was quoted as saying that Apple is starting with American Express in Canada because the company is a card issuer and payment network operator making it easier to coordinate transactions. In the case of Visa and MasterCard, individual banks issue the cards and each bank has their own set of rules for verifying customer identity.

Cash to cards to phones

Perhaps the most resistant obstacle that services like Apple Pay, Google Pay, and Samsung Pay will encounter is a non-technical one.

It took years for consumers to switch from cash to credit cards and debit cards and it’s only recently that chip-enabled transaction to become common place.

The notion of paying for goods and services using a mobile phone has been bandied about in North America for about a decade now. It would be interesting to find out how rapidly Canadian’s will be willing to leave their wallets in their purses and pants pocket and whip out their phones instead.

Maybe it won’t be too long. The iconic Canadian Tire money did go mobile just a few months ago.

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