Mobile payments | BCBusiness
According to Deloitte, Canadian consumers have been slow to adopt to mobile payments.
MiniCheckout founder Laura Aslan says Canadian retailers are too risk-averse, but other mobile payment companies say the secret is a step-by-step approach
Laura Aslan founded and developed her mobile checkout company, MiniCheckout, in Vancouver, but now she’s testing her app in a grocery store in the U.K. After dealing with too many wary, risk-averse retailers in Canada, Aslan says, she had no choice but to go elsewhere.
“Canada is not a great place for the adoption of new technology,” she says. “That’s just how it is here. Canadian businesses tend to sit back and wait for something to catch on somewhere else.”
MiniCheckout is one of many companies trying to solve the same problem: how can customers easily pay for everyday products and groceries with their smart phones? Aslan’s angle is to integrate her app seamlessly with pre-existing point of sale systems, so that customers can scan barcodes with their phone in store, and then simply swipe the phone at a terminal on the way out, just like a self-checkout machine, but on a mobile device.
Aslan pitched the idea to Canadian companies such as London Drugs, but nobody was biting. Then she got a meeting with British retail management company RMS’s CEO Peter O’Toole, and everything changed. “We didn’t have to explain much about the technology or security or anything,” she says, “They got it right away”
MiniCheckout is a tiny player in the mobile payment world, but Aslan’s problems are not unique. While Canada leads in advanced point of sale systems and pin-enabled credit cards, we lag behind Europe, Japan, Hong Kong, and even parts of the US in mobile payment.
"Consumers in Japan have long been using cell phones to pay for train fares, and Kenyans use their phones on a daily basis to settle bills with shopkeepers and transfer funds to family and friends,” reads a Deloitte report on Canada’s mobile payment industry. “Mobile payment penetration in Canada remains low due to a lack of technological standards, limited mobile adoption, a vague value proposition, and an unclear business case.”
“Despite the fact that Canadians are early adopters of technology and very technologically literate, we also are very risk averse,” agrees Payfirma CEO Michael Gokturk. “We question things, and approach things with caution, but with optimism.” Payfirma, which offers an all-under-one-roof point of sale system for stores and online businesses, takes the position that mobile payment can be done in Canada, just not all at once.
"The reason why merchants aren’t demanding it is because you and I aren’t asking for it,” he says. “And that’s the biggest vicious loop there is in the startup ecosystem.”
Instead of pushing consumers and retailers to change their behavior, Gokturk says, the key is to start with one thing at a time. Payfirma, like Square, allows retailers to take credit cards on a mobile device, but consumers do not have to change. Once the market is ripe for mobile wallets, he says, Payfirma will be ready to jump on the bandwagon.
“We’re just not seeing both sides of the market adapt, and in mobile payment, that’s the most difficult thing,” Gokturk says. “You have to line up up a buyer and a seller, and if you try to line up both at the same time, nine times out of ten you will inevitably fail. You have to focus on one side of the equation.”
PayWith, another mobile payment app that sprung out of Vancouver, takes the same strategy but in reverse. Instead of focusing on the retailer side like Payfirma, Paywith wants customers to pay with their phones without inconveniencing businesses. “If you change the process for the merchant, that’s a very difficult shift,” argues CEO David Strebinger, “Changing consumer behavior is much easier.”
PayWith uses a system of virtual credit cards to allow consumers to pay any retailer, whether they use the system or not. For now, only some retailers are available, but Strebinger hopes the app will soon get permission to use tap and pay credit card terminals. “We just need Master Card to say yes, and the whole world changes for us,” Strebinger says.
Like Payfirma, PayWith is tackling one small part of the mobile payment problem, with hopes of expanding once technology and attitudes catch up.
“I don’t think we can immediately solve the problem of being able to pay with your phone everywhere,” Strebinger says. “There’s a technology problem and a training problem that has to be resolved first.”
MiniCheckout, however, will remain in the U.K. for now. Asked if she will bring her app back to Vancouver, Aslan laughs. “I hope so,” she says. “We’re in a better position than before now that we already have it live, and we’re a more solid and structured company than we were before. We’re just trying to find the right salesperson.”