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Apple Pay Makes Headway With Canadian Banks

Negotiations with Apple and Canadian banks to launch Apple Pay north of the U.S. border could have the mobile payment service up and running in Canada as early as November, The Wall Street Journal reported.

This move would be the first step in Apple Pay going international, and comes at a time when Apple is having difficulties making progress in China and the U.K. to bring Apple Pay to those regions. The WSJ’s report indicated that Apple is currently in negotiations with six of Canada’s largest banks about launching Apple Pay in the fall.

The banks listed that are in negotiations to bring Apple Pay aboard include: Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada. And according to WSJ, those six banks make up of 90 percent of all Canada’s retail bank accounts — which could give Apple one foul swoop into the mobile payments market with the banks once the deal goes through.

Recent reports from the research firm Catalyst show iPhones are growing in popularity in Canada and have captured roughly a third of the smartphone market, which is slightly higher than the global average, WSJ said. Canada is also ahead of the NFC contactless payments game in terms of the number of merchants that accept Apple Pay, compared with the amount of U.S. merchants playing catch up to add the technology.

While Canadian banks appear to be behind the concept of Apple Pay, the crutch of the negotiations seems to go back to the proposed fees for the service, according to people said to be close to the matter. This issue is also what may be holding back Apple Pay’s entrance into China as Apple’s negotiations with the Union Pay and the Chinese banks have stalled. An unnamed bank employee in China told Caixin news agency earlier this week that the 2 percent merchant fees for Apple Pay transactions could be what are holding back negotiations as that source indicated Chinese banks say those fees are too high.

Outside of the fee discussions, security concerns continue to be at the heart of most Apple Pay discussions as reports of fraud have plagued recent headlines, which questioned just how secure the mobile payments option truly is. But Canada may also be one step ahead of the game in that area too as the firm McKinsey & Co. is currently working on security protocol to address the issue, sources indicated. The reports also show that Canadian banks are looking into how Apple Pay can have the “secondary authentication” option to ensure customers’ information is confirmed before cards can be used with the iPhone. That option, of course, hasn’t been popular with Apple because it negates the simple “tap-and-pay” concept that Apple expects will entice consumers to use its mobile payments option. Adding more authentication measures will also bring higher costs for banks, WSJ reported.


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