CIBC hopes to steal clients with "mobile wallets"
By Cameron French
TORONTO (Reuters) - Canadian Imperial Bank of Commerce is hoping its deal with Rogers Communications to allow customers to pay for purchases with smartphones will help it steal clients from banking rivals who must now rush to match the offering.
Canada's No. 5 bank announced the deal on Tuesday for the so-called "mobile wallets", which will allow the bank's credit card customers to make retail payments by tapping their smartphones on a sensor.
The move came a day after Canada's banking industry published a set of guidelines to support open standards for mobile wallets.
With banks clamoring to offer competing products, CIBC sees value in being the first off the mark. While the service will not be in place until later in the year, CIBC seems to be in the best position to get its mobile wallet off the ground first.
"There's no doubt we wanted to be early on this, we wanted to be first," David Williamson, CIBC's head of retail and business banking, said in an interview.
"We want more clients, and there's evidence that clients will gravitate to a bank that is innovative or leading."
Canada's banks are scrambling to build domestic market share as an expected housing slowdown threatens to put a squeeze on consumer lending volumes, which are the banks' leading revenue driver.
While CIBC's larger rivals all have significant international operations to churn out growth, CIBC is more domestically focused. Continued...