Apple’s mobile wallet service is receiving the seal of approval from Canada’s banking establishment.
Apple Pay (NASDAQ:AAPL), the mobile wallet that lets customers pay by credit or debit from their phone, has the ability to disrupt the current brick-and-mortar banking system, and it seems like Canada’s big banks are playing along. Starting Tuesday, Interac debit and major credit cards issued by the Royal Bank of Canada (RBC) (TSX:RY) and the Canadian Imperial Bank of Commerce (NYSE:CM) will support the mobile payment platform.
Other smaller banks are following their lead. ATB Financial and Canadian Tire Financial Services (TSX:CTA.A) are also rolled out Apple Pay capabilities on Tuesday. Meanwhile, the Financial Post reports that the other three banks in Canada’s Big Five, including the Bank of Montreal (NYSE:BMO), Toronto-Dominion Bank (NYSE:TD) and the Bank of Nova Scotia (TSX:BNS), will be introducing support for the payments technology in the coming months.
Growth for Apple Pay
This is big news for Apple Pay, which made it’s small scale debut in Canada last last year with American Express (NYSE:AXP). Jennifer Bailey, vice-president of Apple Pay, told the Financial Post that “we are thrilled that seven of Canada’s leading banks, including … every one of the Big Five, are bringing Apple Pay to their customers.”
This expansion into Canada is particularly notable, since Canadian banks were initially hesitant to embrace Apple’s mobile payments platform. Citing the need to maintain client security and foster client relationships, these banking institutions demonstrated reluctance to embrace Apple Pay. However, it seems like the tides have definitely turned.
How it works
Although the idea of mobile banking sounds quite futuristic, the actual experience of using Apple Pay is incredibly simple. As of Tuesday, owners of the Apple Watch, iPhone 6 and more recent iPhone models will be able to add multiple credit and debit cards into their digital wallet. When paying, they merely have to unlock their phone and select which one to use for that transaction.
The climate for mobile banking is clearly becoming more favourable, in Canada and beyond. For investors who want to capitalize upon this shift without putting all of their funds in a tech giant like Apple, might consider an ETF in the mobile payments sector. The PureFunds ISE Mobile Payments ETF (NYSEARCA:IPAY) follows a number of different companies in the tech scene, which all focus specifically on the mobile payments sector.
In this market, investing in an ETF has two main advantages: for investors intrigued by the mobile payments space, this allows them to hone in their investment to an incredibly precise sector. Furthermore, the composite nature of an ETF allows investors to mitigate some of the risk that might come from investing in specific companies. All told, the fund’s share price has gone up 20.3 percent in the past three months, illustrating that mobile payments is indeed a hot space to watch.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.