On May 10, 2016 the Interac Association officially announced the arrival of Apple Pay to Interac users in Canada! RBC and CIBC are the first two major Canadian banks to enable their customers to pay with their Apple devices via their Debit card. TD, Scotiabank and BMO will follow suit in the coming months. The expansion of Apple Pay in Canada marks a significant milestone in the Canadian payment processing industry as well as a landmark in the technology frontier. However, it does raise some interesting questions such as: What will happen to the POS industry after the introduction of Apple Pay in Canada and what is the significance of Apple Pay? What does Apple Pay in Canada mean for business owners? These are some of the bigger picture considerations that industry leaders are mulling over and we will address them in this article.
What Is Apple Pay?
Apple Pay is a mobile payment technology developed by Apple Inc. that allows consumers to make payments with iPhone 6, 6 Plus, Apple Watch-compatible devices such as iPhone 5, iPad Air 2, iPad Pro and iPad Mini 3.
How Does Apple Pay Work with Interac Payment?
Follow the steps outlined below to learn how to operate Interac via Apple Pay on an iPhone:
Step 1: On your iPhone, go to the Wallet App
Step 2 : Click on the (+) sign
Step 3 : Follow the instructions to add your Debit card information
Step 4: Hold your phone to the contactless reader of the merchant’s terminal or use your thumb to activate the Wallet app to pay
You know we live in a wonderful age of technology when customers have the ability to pay with their wrist-watch! Apple Watch makes this science fiction-like concept a reality with its Apple Pay integration. Customers should look for the Apple Pay logo at participating retailers such as Aldo, Chapters, Indigo, Tim Horton’s, Petro Canada, Canadian Tire, and of course the Apple store…with many more to follow suit. RBC and CIBC are already the pioneers in facilitating Apple Pay at checkout counters via Interac as long as the total is $100 or less.
Benefits of Using Apple Pay in Canada with Support for Interac Payments
The advanced technology of Apple Pay not only comes with convenience and ease of use but also higher security features and zero liabilities on the customer. According to the Interac website, whenever customers rely on Apple Pay to pay for their transactions, they are equally protected by the same features as paying with their Interac Debit and Interac Flash cards.
The Interac Zero Liability policy protects customers from circumstantial losses beyond their control, losses include: technical errors, system problems and unauthorized transactions.
Passcode and Touch ID verification
Apple Pay is protected the same way as our iPhones are protected, with a Touch ID and Passcode. Similar to activating our iPhones, when customers use Apple Pay to make a purchase, they can simply activate their Touch ID or Passcode to pay.
Secure and private transactions
One might think that when we add our Debit card information to our iPhones, the device saves our account numbers. However, this is hardly the case. Instead a unique number is assigned, encrypted and securely stored in the Secure Element on the phone. Therefore, the account number is actually never stored or shared with any merchants.
Entering of Passcode is only required when customers reached their single transaction or cumulative limit. The customers’ financial institutions mandate the set limit.
Protection for lost devices
In the event that iPhones are lost or even stolen, Apple recommends using the “Find my iPhone” app to quickly put phones into Lost Mode and thus terminate Apple Pay. Another option is to contact the financial institution to remove our Debit card information from the iPhone Wallet.
Competitors of Apple Pay
A technology giant like Apple is not met without competitors; other major industry players such as Samsung and Google have launched their own applications – Samsung Pay and Android Pay.
Similar to Apple, Samsung Pay is only available on select compatible devices. For example owners of S6, S6 edge, S6 edge+ and the Note5 are able to use Samsung Pay. The concept is essentially the same: enabling Samsung customers to effectively use their phones to pay for merchandise. Unlike Apple Pay, Samsung Pay has some limits. Apple Pay can be used for mobile purchases; Samsung Pay only works at physical retailers. Furthermore, Samsung Pay is only available in the US and not in Canada (Samsung Pay).
Advantages of Samsung Pay vs. Apple Pay
Apple Pay requires NFC contactless technology and sometimes this technology can fail. On the other hand, Samsung Pay’s magnetic technology can be beneficial as it uses a magnetic signal that mimics the traditional card swipe, so it works with existing terminals. Customers don’t need to worry about what terminals their merchant has because their phone will do the work for them (Samsung Pay).
Android Pay lets Android phone users pay at contactless stations and with the Android Wallet technology. It works similar to Apple and Samsung Pay. Android Pay allows mobile users to make payments at contactless points of sale and in Android apps (Android Pay).
Advantages of Android Pay vs. Apple Pay
Apple Pay is only available to iPhone 6 and above and the latest version of Apple tablets, so basically only iPhones can use Apple Pay. On the Android side, things are much more open. Android Pay occurs when a customer taps his/her phone against the NFC contactless technology and runs on Android 4.4 KitKat or newer models (Android Pay vs. Apple Pay).
Therefore, Apple Pay is moving ahead of Samsung and Android Pay as the former is now available in Canada where customers are able to use Apple Pay in place of their Credit and Debit cards. On the other hand, the Samsung and Android Pay are not available in Canada yet.
Significance of Apple Pay in Canada
Interac is considered one of the most popular payment methods in Canada, as it is estimated that 94% of Canadians own Debit cards (Techvibes). Since Apple Pay in Canada now supports Interac, one should expect the following trends to occur:
- The appetite for mobile will continue to grow
Canadians, especially Millennials, are open to alternative forms of banking. In fact, Canadians are looking for more convenient ways to manage their finances on-the-go and on their mobiles. Many have already embraced the mobile apps introduced by Canadian Banks. Therefore, the arrival of Apple Pay in Canada will change the dynamics of how Canadians will pay for their merchandise as Canadians like to keep their phones nearby about 90% of the day. Considering this statistic, we should expect to see a fast rise of Apple Pay in Canada and its usage (Apple Pay and its Influences) .
- Early bank gets the boost
Canadian consumers have been eagerly waiting for the day that Interac payments can be supported by iPhones, so when the news broke out that Apple Pay is the new payment technology developed by Apple Inc., Canadians were immediately asking their banks when it would arrive to Canada. Regardless of the marginal profit banks make off of Interac transactions, it is still wise for them to adopt Apple Pay in Canada and its associated technology. This is because banks understand the increasing popularity of innovations that are easy, high-tech and convenient. Consequently, over the years, banks have invested heavily in testing implementation of tech trends like wearables and biometrics. The reality that RBC and CIBC are the first banks to launch Apple Pay in Canada may help them become the default in consumers’ digital wallets. Furthermore, according to the website Techvibes, a Google survey conducted showed that about half of Millennials would switch banks to gain a better mobile experience (Apple Pay and its Influences).
- Increased privacy and reduced fraud
Every year, Canadian banks and credit issuers spend millions of dollars to cover for fraudulent transactions. Apple Pay could be a saviour to banks and consumers because Apple Pay has proven to be more secure than traditional methods of payment and more private. Plus, Apple Pay in Canada is only a fingertip away to achieve payment completion (Apple Pay and its Influences).
What Business Owners need to know about Apple Pay in Canada
Since Apple Pay utilizes NFC contactless technology, it is suffice to say that as long as a merchant’s terminal allows for tapping one’s card to pay, that merchant can accept Apple Pay. Merchants who are looking to initiate POS solutions that allow their customers to easily pay via mobile device should consider the solutions we offer at MONEXgroup. Not only does MONEXgroup provide the latest NFC contactless technology in our POS terminals, but with our competitive rates and outstanding customer service, we have successfully switched many thousands of Canadian business owners over to our service! All of our POS terminals employ the latest technologies that allow for fast, reliable and flexible checkout options. Our state-of-the-art terminals minimize errors and increase speed of service. Most importantly, MONEXgroup provides the flex terminal, which provides the efficiency of processing payments with Contactless NFC readers, enabling the end-user to settle their payments in-store by using their Apple Pay, now equipped with Interac support.
When partnering with the number one payment processor in Canada; MONEXgroup will increase your efficiency and quality of service and lower the related costs. Request a Cost Comparison Analysis today.
Author: Lindsey Lu, Marketing Communication Specialist, MONEXgroup
Contact Info: email@example.com
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