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Canadian banks presented a blueprint on Monday that will enable consumers to pay for goods with a tap of their smartphones, as financial institutions seek to take advantage of existing infrastructure that can support mobile payments.
Thousands of Canadian retailers already have the necessary equipment for mobile payments in place, and the Canadian Bankers Association (CBA), a trade body, introduced the voluntary guidelines as a way of setting open standards for secure transactions over smartphones, which will be used as "tap-and-go" credit or debit cards.
"The financial institutions have come together to create a reference model that lays out how mobile payments can be launched in Canada efficiently, with a high degree of security and a compelling customer experience," said Stephen Gardiner, a managing director at consultancy Accenture PLC in Toronto. "These are all critical things to drive adoption," he said.
The banks must still reach agreement with credit card companies and telecoms before launching "mobile wallets". Several sources involved in those talks said last month that the discussions were in their final stages.
Rogers Communications Inc., the country's largest wireless company, said at the time it was planning to launch a mobile wallet within six months.
"The payment ecosystem takes the coordination of many parties to function effectively," the CBA said. "It is hoped that providing early clarity on industry participation in the ecosystem will help stabilize and build efficiencies into the future deployment of mobile payments in Canada."
The trade body said the framework allows for different business models and ensures competition to accelerate adoption, while keeping confidential data secure and aligning with existing bank regulations.
Handset makers can also play a role independent of network operators, and the guidelines do not state a preference. Google Inc, which supplies the popular Android operating system to several device makers, is also pushing its own mobile wallet.
The guidelines cover near-field communication (NFC) chips showing up in a growing number of smartphones. The chips can hold secure data and exchange it wirelessly across very short distances, meaning they can communicate with the sophisticated electronic readers already in Canadian shops from coast to coast.
The readers, most of them in fast food outlets, gasoline stations, grocery and convenience stores and coffee shops, work with existing credit and debit cards that emit similar signals. NFC chips are considered a safer alternative to traditional magnetic strips, which are more easily hacked.