Your credit cards swipes may be numbered. That’s the news from Canadian Imperial Bank of Commerce and Rogers Communication this month. The commercial bank, which is the fifth biggest one in Canada, and the largest communications provider, have ushered in the age of the mobile wallet for Canadian consumers, forgoing the need to pull out a credit card to swipe and pay.
The Canadian Bankers Association paved the way for the new payment system by creating a framework of guidelines, which banks and credit unions have endorsed. The association also took care to make sure that using your smart phone as a payment method in lieu of your credit card will result in safe and secure transactions.
Canada Behind The Times?
The recent announcement is a collective sigh of relief for critics who just two years ago feared that the lag in developments in digital payment systems in Canada would place the nation at odds with an ever-growing digital marketplace. Now that the groundwork has been laid for mobile wallets to become a common form of payment, more commercial banks and mobile providers will be able to adapt to these kinds of financial transactions more easily.
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Mobile wallets also introduce revenue-producing potential for the two end parties; both mobile providers and commercial banks can draw in more business by presenting more options to their customers.
How do mobile wallets work?
Many retailers already employ the scanners needed to use mobile devices that will be embedded with a microchip that transmits bank account information. Rogers Communication is expected to release a special edition of the Blackberry later this year that can put those readers to use. The method makes payment a one-touch process in which the phone’s owner can simply tap the reader with their handset to pay for goods and services instead of swiping a credit card. Though the Rogers-CIBC partnership has a head start on offering this kind of payment method to its customers, mobile provider Telus Corp is not far behind.
Changing Consumer Attitudes
Though most consumers welcome the new development, they should also be wary of additional charges from banks for using their mobile wallets in the future. And in a nation where 45 percent of credit card holders with more than the average amount of debt actually have more, gaining access to their funds through yet another payment method that doesn’t involve a cash exchange could lead to even more damaging spending habits.
To keep up with the financial and technological times without breaking the bank, Canadians can use information resources like Ratesupermarket to figure out how to make this new spending trend work in their favor. When it comes to spending with ease, a little budgeting and account balance vigilance can go a long way.
Overall, however, the arrival of the mobile wallet has been a while in the making. With its success in Europe, Asia, and the US, Canada’s turn to embrace the technology is long overdue.