Canada smartphones soon to double as credit cards

Tue May 15, 2012 2:56pm EDT
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By Alastair Sharp and Cameron French

TORONTO (Reuters) - Canadians may soon be able to pay for purchases with a quick tap of their smartphones after a major bank and the country's largest wireless carrier struck a deal to embed credit card information on handsets equipped with a chip to transmit data.

Rogers Communications Inc and Canadian Imperial Bank of Commerce later this year will launch the so-called mobile wallet on some BlackBerry models from Research In Motion Ltd. Devices from other handset makers are expected to follow.

The tool allows shoppers to pay by simply tapping their phone on a special electronic reader already installed at many Canadian retailers. Transactions will credit a CIBC customer's existing loyalty program.

"It will no doubt change the way Canadians pay for purchases," said David Williamson, head of retail banking at CIBC, the country's fifth largest bank, which expects to add debit cards to the service at a later date.

The agreement could mark the beginning of a Canadian boom in mobile payments, a concept that has met with limited success in Japan, South Korea and other countries where it has been introduced. Meanwhile, Google and others are setting up similar payment systems in the United States.

Other big Canadian banks and telecoms are expected to follow the lead of CIBC and Rogers in the coming months.

The Roger-CIBC deal was announced the day after Canada's banking industry published a set of guidelines to support open standards for mobile wallets.

The country's third-largest wireless operator, Telus Corp, has said it is working with a number of banks to offer a mobile wallet to its customers in the near future.   Continued...