Apple’s mobile-payments service Apple Pay has received a big boost.
Starting on Tuesday, the Royal Bank of Canada and Canadian Imperial Bank of Commerce will add support for Apple Pay across their debit and credit cards, Canada’s Financial Post has confirmed. The report added that Apple (AAPL) has inked similar deals with other major banks in the country and will have the full support of Canada’s so-called “Big Five” in the “coming months.”
Apple Pay is one of many mobile payment solutions vying for control over the booming market. Indeed, Apple is flanked by a wide range of companies offering similar solutions, including Google (GOOGL) and Samsung. Major banks have also banded together in an effort to capitalize on what all the companies believe could be the next frontier for making payments.
The idea behind mobile payments is simple: a person connects his or her debit or credit cards to, say, an Apple Pay account. Once the consumer is ready to make a payment, the person presses a finger on a built-in fingerprint sensor on smartphones. As long as the device is close enough to the credit card machine, the two communicate and payment is made. Apple has long argued that this is a more secure service than traditional credit cards because the actual credit card number is never transferred through its servers in the transaction.
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While the technology itself is simple enough to use, the race is on behind the scenes to get third parties involved. In order for one of the many mobile-payments providers to break out from the pack, the companies need to ink deals with banks and retailers that will support the technology. In other words, having the technology isn’t enough; the real game is getting as many partners onboard as possible to make the service more appealing to customers.
That’s precisely why Apple’s deals in Canada could prove to be a boon for the company. The iPhone maker launched Apple Pay in the U.S. In 2014, but the service didn’t make its way to Canada until November 2015. Even then, Apple Pay, which is available in a handful of countries, only worked with American Express cards. By signing on Canada’s “Big Five,” as well as two other major banks in the country, Apple is now in a position to dramatically expand its influence across the country.
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So far, Apple hasn’t said exactly how successful Apple Pay has been, but most analysts argue the market will grow considerably in the coming years as more banks and retailers come online and companies get more of their mobile-payment-ready devices in customer hands.
Apple’s vice president of Apple Pay, Jennifer Bailey, did tell Financial Post in an interview that the company’s users have so far “spent billions of dollars in Apple Pay.” Bailey added that Apple Pay is “adding one million new users per week.”