Apple Pay Set To Expand Into Canada


A Canadian version of the system would be Apple Pay’s first move outside the US

Apple Pay may be arriving in Canada this autumn in its first expansion outside the US, according to a report in The Wall Street Journal.

Apple is negotiating with Canada’s six largest banks, which together have a market share of 90 percent, but faces resistance to its fee structure and concern over security issues like those experienced by US banks supporting the system, according to the report, which cited
unnamed sources familiar with the matter.


The banks reportedly 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. It isn’t certain whether all the banks would agree to launch at the same time, as talks are ongoing, according to the Journal.

Apple Pay enables contactless payments using near-field communications (NFC) over newer iPhone models as well as the upcoming Apple Watch. It launched in the US in October and is available broadly in that country, but expansion abroad requires time-consuming negotiations with banks and regulators. The UK is thought to be one of the markets being eyed by Apple.

The Canadian market is attractive for Apple Pay in part because of the iPhone’s relatively high market share there, accounting for one-third of the country’s smartphones, but unlike in the US the system would be competing with established contactless payment cards that are already in wide use.

Apple Pay accounted for two-thirds of all contactless payments on the three major credit card networks by late January, according to the company.

The Journal’s sources said Canadian banks may face higher fees than their US counterparts and are concerned that costs could rise once the system is well-established.

The banks in question are reportedly concerned about the growing prevalence of fraud over Apple Pay in the US, and have hired consultancy McKinsey & Co. to develop a security protocol for the system. They are pressing Apple to require a secondary verification to enable Apple Pay, such as a PIN, an interaction with a mobile banking application or the use of a one-time passcode sent via text message, according to the report.

However, such an extra step would result in an experience that’s more complex than that of Canada’s existing contactless payment cards.

Apple has recently expanded Apple Pay in deals with more retailers, including Disney World and JetBlue, which will accept in-flight contactless payments using iPad Minis outfitted with an NFC attachment.

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