Apple Pay not expected in Canada any time soon

While Apple is heralding Apple Pay, its new mobile payment system, as a roaring success, Canadians shouldn't expect to use their newest iPhone to pay for goods any time soon, as It's unlikely the company will be rolling out the service in Canada in the immediate future. 

"Apple has given no indication as to when it will come to Canada or even if," said analyst Troy Crandall, of MacDougall, MacDougall & MacTier. "However, it is logical that it is something they are likely working on for the future. But is Canada one of the main priorities? I would probably say no."

Apple Pay lets users of the newest models of iPhones and iPads pay for purchases through their devices on credit or debit card accounts without having to show their card or account number.

On Monday, during a tech industry conference in California, Apple chief executive Tim Cook said the payment system had more than one million activations in the first three days after it became available, and is now more widely used than any competing payment system.

I think it's the novelty," Crandall said about Apple Pay's success. "Apple's kind of made it a fun way to pay."

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Making people part with their money is the most difficult part of the transaction, Crandall said, and "if you can actually make that part fun, that’s really powerful. And I think that’s what Apple has successfully done. They’ve made it easy, and they’ve made it fun."

Contacted by CBC News, a spokeswoman for Apple would not say when or if there were any plans for offering the system into Canada,. She referred to the speech Cook gave on Oct. 14, which made no mention of any plans for Canada.

China probably next target

"I wouldn't say Canada is necessarily a priority," Crandall said, adding that China is probably Apple's next target. Indeed, Jack Ma, executive chairman of the Chinese e-commerce giant Alibaba, told the same audience at this week's California tech conference that he would be "very interested" in teaming with Apple to bring Apple Pay to China. 

Canada certainly poses no technological barriers for Apple Pay. The system is based on a near-field communication (NFC) chip, which transfers encrypted data from one device to another. Many Canadian retailers and services already use similar technology with the use of Paypass, which allows users to just tap their debit or credit cards on terminals in order to pay.

The  launch of Apple Pay in Canada will be based partly on how cumbersome it will be to introduce from a regulatory standpoint.

"If it's going to be pretty tough, they'll just probably focus on the easier [countries] first," Crandall said.

Not only would Apple Pay have to comply with Canada's privacy regulations, it would also need the approval of the banks, which are much more conservative than their American counterparts. Since banks issue credit cards and debit cards (which can also be used in Apple Pay), Apple would need to enter into a partnership with the major Canadian banks, as it did with major banks in the U.S. 

Canada better suited for Apple Pay

"There's a good argument to say that Canada is better suited environment for Apple Pay to launch, because we already have these tap-to-pay terminals installed throughout Canada, and we're already using them," said Brian Jackson, editor of ITBusiness.ca. "It's really a deal with the banks that has to be done."

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However, Jackson said it's possible that Canadian banks may set up obstacles, wanting to own mobile payments themselves, and create an app that allows Canadians to pay through that avenue.

Earlier this month, Jeff Martin, vice-president and CIO of direct channels technology solutions at TD Group, told a crowd at the Mobile Enterprise Canada Summit that the bank is closely watching the developments of Apple Pay in the U.S, reported IT World Canada.

He predicted that Apply Pay is at least a year away from coming to Canada and noted that U.S. banks and credit card issuers can make money from debit transactions while Canadian financial institutions do not.

“There are a lot of regulatory things they will have to work out,” he said. “We have a mobile wallet. We can do what Apple Pay does. You could have done it a few months ago.”

Better shopping experience

While Apple has entered partnerships with major U.S. banks and large retail chains including Macy's, Walgreen and McDonald's., critics have noted that Apple Pay isn't accepted by other large chains. Among them are the drugstore chains CVS Caremark and Rite Aid, which belong to a retail coalition working on a rival system.

Michael LeBlanc, senior vice president of digital retail for the Retail Council of Canada, said the organization supports any that makes for a better shopping experience for our customers,

And to the degree it would do that, we broadly support it," he said. 

"The other thing we look for is something that helps our operating costs and ultimately allow us to lower our costs to consumers. To us, Apple Pay seems to be another layer in the payment supply chain versus a competitive payment type."