Apple Planning November Launch of Apple Pay in Canada

Apple is planning to launch Apple Pay in Canada later this year, according to The Wall Street Journal. The report, citing people familiar with the matter, claims Apple is in negotiations with six Canadian banks about a potential November launch of the mobile payments service, which debuted in the United States last October and has yet to become available in other countries.

The six Canadian banks reportedly in talks with Apple include the Royal Bank of Canada, TD Canada Trust, Scotiabank, Bank of Montreal, CIBC and National Bank of Canada. The financial institutions, which together account for more than 90% of Canadian bank accounts, are open to supporting Apple Pay in Canada, although have expressed concern about higher fees and potential security issues.

"The banks are open to an agreement, but they aren’t happy with Apple’s fee proposals and are concerned about security vulnerabilities like the ones that U.S. banks experienced as they rolled out the service, the people said."

Canada is a well-prepared candidate to receive Apple Pay support, as many retailers and businesses across the country are already equipped with contactless payment terminals that are required for the iPhone-based mobile payments service. The country was one of the earlier adopters of Chip-and-PIN debit and credit cards that can be tapped against a payment terminal when making a purchase, and Apple Pay would be a natural extension of that functionality.

The six Canadian banks have reportedly formed a consortium and hired consultancy firm McKinsey & Co. to develop a security protocol for Apple Pay. The financial institutions have also considered the need for secondary authentication to verify customer information, such as entering a PIN, logging on to a mobile banking app or using a one-time passcode sent via text message before cards can be used on Apple Pay.

Apple announced last year that it is targeting international expansion of Apple Pay, and speculation has mainly been focused upon Canada, China and the United Kingdom. Apple's efforts to launch Apple Pay in China have faced some roadblocks, however, and Apple's talks to roll out Apple Pay in the United Kingdom during the first half of 2015 are similarly stalled as some banks are concerned about potential privacy issues.