In Canada, phones poised to challenge credit cards

Wed Apr 25, 2012 10:50am EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Thousands of Canadian retailers already have equipment in place to let customers pay for purchases with a swipe of their mobile phones, putting the country in the lead in developing a system that could one day make cash obsolete.

All that's needed is an agreement between banks, credit card companies and telecoms, and that appears to be coming soon, promising to transform how Canadians pay for everything from their morning coffee to a tankful of gasoline.

If consumers embrace the system - and that's still a big "if" - clip-and-save coupons, transit passes, library cards and perhaps even driver's licenses could become things of the past.

"It is truly ground-breaking and revolutionary," said Stephen Gardiner, a managing partner for strategy at Accenture PLC, a consultancy that advises companies on mobile commerce.

JUMP INTO LEAD

Canada is not the first country to try such a project. Phone companies, credit card providers and banks in Britain, Japan and South Korea have tried to set up mobile payment systems, but none have yet lived up to the hype.

In South Korea, for example, residents have used touch-and-go mass transit cards for years. But only a limited number of stores can process such transactions and phone-based payments have yet to take off.

In Britain, European Union regulators are examining whether telecom operators working together to set up a mobile payments system are violating competition rules, while Japanese consumers have yet to be tempted away from credit and debit cards.   Continued...

 
A student uses his mobile phone as he walks inside the Engineering building at the University of Waterloo, located beside the Blackberry maker's Research in Motion (RIM) headquarters in Waterloo April 18, 2012. REUTERS/Mark Blinch