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On May 14, 2012, the Canadian Bankers Association (CBA)
published a set of voluntary guidelines to govern Canada's
emerging mobile payments marketplace. The guidelines, titled
the Canadian NFC Mobile Payments Reference
Model, establish a series of recommendations on
mobile phone payment functionality, security features and the
logistics of processing near field communication (NFC) payments,
also known as "tap-and-go" technology.
Mobile phone payment systems, also known as mobile wallets, are
capable of storing a user's credit and banking information on
chips known as SIM cards, and may also store other personal
information, such as driver's licenses, library cards and
transit passes. Mobile wallets can enable users to make
purchases through phone software, or by physically tapping their
phones against NFC receivers to make automatic purchases without
requiring signatures or PIN numbers. Such systems have become
increasingly popular outside of Canada. By illustration, statistics published by Forbes
indicate that U.S. mobile payments on "Black Friday" in
2011 soared by 538% in comparison to the previous year.
Mobile wallets and other alternative payment systems are
allowing new entrants to compete in a field traditionally dominated
by banks and credit cards.Rogers Telecommunications and CIBC have
recently announced a partnership whereby CIBC will pay
Rogers to store Visa and MasterCard information on Rogers'
phones. The arrangement will allow Rogers to essentially
"rent" space on a user's SIM card. Separately,
Rogers has also applied for a banking
licence to become a credit card issuer,
signalling its potential to further develop its role in the payment
processing industry.
While mobile wallets present a number of convenient features,
they have also given rise to security, risk and privacy concerns.
The CBA's guidelines address some of these issues, including
who may access data stored on mobile wallets, such as loyalty
points information, coupons, transaction amounts, transaction times
and transaction locations. However, while the CBA guidelines remain
voluntary and address NFC phones only, the federal government has
indicated that greater regulation of mobile and
digital payments may not be far away.
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