M-commerce fails to reel in retailers
Wireless cellphone payments face barrier
While the country's top cellphone carriers recently
teamed up to prepare for the introduction of wireless
payments, the concept doesn't yet appear to be high on
the agenda of many consumer-focused businesses.
Compared with countries where so-called mobile commerce
(m-commerce) is more advanced, Canadians use their
cellphones to pay for only a few products or services,
such as ring tones and parking. In contrast, consumers
in Japan reach for their cellphones when they buy goods
in convenience stores or vending machines, go to the
movies, and even fly.
After adding camera, music, and TV features to
cellphones, Canadian wireless companies have decided the
time has come to transform wireless devices into wallets
here, too. Two weeks ago, Bell Mobility, Telus Mobility
and Rogers Wireless launched a jointly owned venture
called Wireless Payment Services that will focus on
creating a standardized system.
Dawood Khan, a partner at wireless consulting firm Kazam
Technologies, says there are opportunities to use
wireless payments for convenience where small change is
required, and when consumers want to avoid lineups. "For
a solution to be successful, it has to address both the
retailer's needs and the consumer's needs."
A number of firms agree wireless payments could be
interesting -- but it's not on their current agenda.
"It is certainly one thing we'd look at among other
things," said Pat Marshall, a spokeswoman for movie
theatre chain Cineplex Entertainment LP. The company
wants to make it easier for customers to buy tickets,
she said, pointing to plans to expand its on-line
ticketing system as an example. "Our demographic is
highly frequented by youth, and cellphones are a major
focus of a youth's life."
At convenience store chain 7-Eleven Canada Inc.,
wireless payments are not on the horizon, according to
company spokeswoman Laurie Smith.
The same goes for Toronto's Beck Taxi. It's rolling out
the Interac direct debit service in its taxi fleet, but
has no plans for cellphone payments, according to
marketing manager Andrew Whiteley -- although he's not
dismissing it. "If it was a convenient application for
the user and for us . . . then why not."
A major starting point for m-commerce in Canada will be
when Wireless Payment Services introduces a system in
the third quarter of 2006 that will let consumers use
their cellphones to buy additional minutes with debit or
credit cards, company president Jeff Chorlton says. He
adds that multinational consumer-related businesses with
operations here are already conducting pilots in other
parts of the world. "They see commercial transactions
going in this direction."
Nonetheless, there are hurdles for providers to clear
before wireless payments start to gain traction among
businesses and consumers. The carriers need to create an
easy user experience, address security and privacy
concerns, and price it attractively, according to a
recent Kazam report.
In one of the few m-commerce experiments going on in
Canada, Bell Canada and Coca-Cola Bottling Co., using
technology from cStar Technologies Inc. and other firms,
this year conducted a wireless payment trial at the
Ambassador Conference Resort in Kingston.
The hotel's guests could buy Coca-Cola's juices and soft
drinks using their room cards or cellphones. During the
trial there was an increase in transactions at the
vending machines, according to Allan de Paulsen, a Bell
"In terms of technology, it worked very well," added
Alain Ayotte, director of cold drink operations for
Canada at Coca-Cola Bottling.
Coca-Cola is looking at different types of technology,
including a system from cStar, which started developing
wireless payment products for vending and other machines
Mr. Ayotte said the company wants to do more trials of
cellphone, room card and credit card payments next year
in different venues. "We wish to see the real impact on
the business and consumer response at more than just one
location," Mr. Ayotte said.