While the quick and convenient tap-and-pay method for debit or credit cards helps consumers save time, few people may be aware that there is an equally fast yet much more secure way to make your payments via your mobile phone.

Contactless payment

“We see a lot of consumers in Canada using contactless transaction payments with credit cards but not with phones,” says Giles Sutherland, Vice President of Strategic Alliances at Carta Worldwide, a Canadian FinTech start-up that specializes in mobile payments in international markets. A wave of new products and services is expected for the Canadian market as global innovations start to impact the Canadian market. “There have been attempts over the years to introduce mobile phone payments but, for the average Canadian mobile payment is almost non existent.”

Cell phone payments may get more publicity with the recent launch of Apple Pay in Canada. However, according to Sutherland, one reason for the slow adoption of mobile phone payments may be because many Canadians do not appreciate just how much more secure their financial information is with their cell phones.


Thanks to tokenization (a process where sensitive card data is replaced with a new encrypted values) a user’s credit card information is never actually input into the phone. “You can leave your card at home,” explains Sutherland. “Your information is never passed on, so those big breaches of personal credit card information that we hear about in the news because someone gets hold of a consumer’s actual credit information can never happen, because a token stops that from happening. With tokenization, you’re taking a massive amount of possible fraud exposure out of the system.”

“Your information is never passed on, so those big breaches of personal credit card information that we hear about in the news because someone gets hold of a consumer’s actual credit information can never happen."

Adam Nanjee, Head of Financial Technology, MaRS Discovery District, agrees with Sutherland’s assessment of the security of mobile payments. “Canada is amongst the world leaders in terms of mobile security, with a vibrant scene of ventures and start-ups working to develop innovation solutions in security and authentication. Canada’s large financial institutions have proved more responsive than banks in other countries to adopting disruptive technology.”

Enhancing security

Security is further enhanced because mobile phone payments can also be given strict parameters that can limit the maximum amount of purchases allowed or even what kind of payments are permitted. Further buttressing consumer security are the safety measures designed specifically for cell phones themselves. Unlike a conventional wallet, to access a smartphone you may need a code or fingerprint or even facial recognition. “A mobile phone offers multiple layers of authentication. Payments using this method are exponentially more secure,” insists Sutherland. “To add to that, there are even studies that show you can go for hours without realizing you’ve lost your wallet, but you will notice you’ve lost your smartphone within minutes.”

Mobile payments don’t just offer users better security; they also allow for enhanced user experiences. For example, at your local coffee shop you could place and pay for an order through an app on your phone so that by the time you actually get to the store you just pop in and pick up your coffee without waiting in line. Or you could get a ping on your phone as you walk by your favourite store that will let you know there is a sale on your favourite item. Sutherland points out that mobile phones will dramatically enhance the way consumers  collect and use rewards, loyalty points, coupons, or gift cards, and the convenience of electronic receipts means you don’t have to worry about losing a piece of paper.

According to Nanjee, mobile payments are the way of the future. “User experience is paramount in the mobile world – it only takes one bad experience for a consumer to switch. People expect seamless products, and Canadian banks, PayPal and Apple Pay have been designing solutions that have built confidence in mobile payments among Canadians. We are seeing growth in the number of contactless and mobile payments month over month.” Sutherland is equally as enthusiastic. “Mobile payments will give businesses and consumers a whole new way to meaningfully interact. They will help consumers shop smarter and drive sales for merchants. Targeted, value-added services are one of the most exciting features of mobile payments. They are really going to shake things up.”