Moving Target - NFC Mobile Payments Poised for Widespread Adoption in Canada

The Canadian Bankers Association has published the Canadian NFC Mobile Payments Reference Model (the Reference Model), which is expected to facilitate the widespread roll-out of near field communications (NFC) mobile payment capabilities in Canada. CIBC and Rogers have already announced the upcoming launch of a mobile payments capability through which CIBC clients will be able access their CIBC Visa or MasterCard on select smartphones. Every major Canadian financial institution and mobile network operator can be expected to follow suit.

The voluntary guidelines in the Reference Model were prepared in response to a request from the federal government’s Task Force for the Payments System Review that financial institutions develop mobile payment standards. The guidelines were developed and have been adopted by major Canadian banks and credit unions. For the rest of the industry, adherence is optional.

The Reference Model refers only to financial transactions in which payment card credentials are stored on a SIM card or embedded in the secure element of a smartphone. The user can make a purchase by selecting a payment method via the “mobile wallet” stored on the smartphone and then tapping the smartphone on an NFC-enabled point-of-sale device.

The mobile payment system will use open technology based on standards and guidelines in use elsewhere in the world, enabling participants other than financial institution credit and debit card issuers to build mobile wallet applications for consumers. Eventually, a mobile wallet may contain, for example, the credentials of government-issued identification cards, library cards, transit passes and merchant loyalty cards.

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