Canada's efforts to transform the mobile device into the mobile wallet still lag behind Asian markets, but they are picking up steam with recent announcements by major credit card companies. In November Visa Canada and the Royal Bank of Canada announced an Ontario-based pilot project. RBC staff will be armed with mobile devices embedded with NFC contactless chips, enabling them to make purchases at point-of-sale (PoS) locations using the Visa payWave feature. The pilot will test a number of elements including the security in delivering and storing account information on the devices, mobile payments at retailers, storage and redemption of mobile coupons as well as mobile account management. The study is slated to be completed this year.The Visa pilot builds on the Visa Mobile Platform, launched last year. The platform lays the foundation for commercial availability of mobile payments and related services such as over-the-air (OTA) personalization, coupons, and direct marketing tactics. It is designed to work within the existing infrastructures established by carriers and financial institutions, while providing consumers with a consistent payment experience across borders and handset models.Visa declined to comment for this story, but MasterCard Canada's Nagesh Devata, VP, acceptance developments and new products, says international trials of mobile payment services are showing favorable results. "MasterCard has been involved in a number of trials globally, and they've all been very successful," he says. "I think the trials validate that the technology works."In March 2007, MasterCard launched a mobile payment pilot in cooperation with Taiwan Mobile and Taipei Fubon Bank. Selected customers armed with a Nokia 3220 NFC capable device could flash their phones, using MasterCard PayPass contactless payment technology, at more than 2,000 PoS in Taiwan and walk away with their purchases.In November, the company announced its participation in a large trial involving 12 mobile operators from the Asia-Pacific region, Europe as well as the United States. While MasterCard has several ongoing trials around the world and is likely eyeing pilot projects here in Canada, Devata is unable to disclose any information on upcoming Canadian trials or launches.MasterCard's PayPass technology is already available in Canada, albeit in card form. Canadian consumers can flash their RFID chip-enabled cards at merchants like Petro Canada, Tim Hortons and Loblaws and walk away without worrying about receipts or signatures. Visa's payWave and American Express' ExpressPay offer similar benefits for consumers at merchants' PoS terminals. But it could be years before the global community, and Canadians, are able to fully take advantage of these benefits from their mobile phones."I think the difficulty right now is figuring out the right type of handset, the right type of features and the right type of partnerships in this ecosystem," says Devata. "I think commercially, over the next couple of years we'll really see it come out." Canadian carriers jumping on the bandwagonThat's not to say there hasn't been some progress in the Canadian mobile payment field. In October, Bell Mobility and Cineplex Entertainment LP announced that Bell customers would be able to purchase movie tickets directly from their phones. To buy tickets, customers text the word ‘tickets' to the JUMP shortcode, Bell responds with a web link to the purchase page and customers make their purchase. A mobile ticket in the form of a bar code image is sent to the client's phone, which the customer then scans at a kiosk in the theatre and the tickets are printed out. Charges appear on their monthly invoice. While the service may save moviegoers from the disappointment of arriving at a theatre for a sold-out show, it's still a far cry from the point-and-click convenience of mobile proximity payments. Bell spokesperson Jason Laszlo, however, is optimistic about the evolution of mobile payments. "I'm confident there will be a future (in mobile payments) for Bell and more and more will be done wirelessly."Telus Corp. and Rogers Communications Inc. declined to be interviewed for this story, but it seems consumers are increasingly ready to embrace the notion of mobile payments. In a September 2007 survey conducted by Visa Canada, 51 % of respondents said they would be interested in a phone with mobile payment capabilities. This echoes a March 2007 study conducted by Fabrizio, McLaughlin & Associates in the US, where 57% of survey respondents indicated an interest in purchasing such devices.A 2005 Decima Research survey, conducted for Report on Wireless, revealed there was a healthy percentage of Canadians interested in buying goods and services from their cell phones. The research showed that 8% of Canadians were interested in purchasing coffee, snacks, movie tickets or paying for public transportation using their mobile devices. Two years ago, this would have been considered significant given the early stage of the technology and consumers' limited familiarity with it. While consumers may enjoy the convenience these services offer, financial institutions, credit card companies and carriers also stand to gain. "From MasterCard's point of view, we expect that mobile payments will definitely enhance our business once it's widely acceptable," says Devata. "The convenience of the transactions will make it easier for consumers to make more purchases with smaller dollar amounts." For carriers, mobile payments not only offer the potential for increased traffic and usage fees, but also a way to differentiate themselves from the competitors. In the Fabrizio, McLaughlin & Associates survey, 64% of respondents between 18-42 years said they would consider switching carriers for the service. In Visa Canada's survey, two thirds of respondents indicated the ability to make mobile payments would influence their handset purchase decisions.ABI Research data indicate that shipments of mobile phones with NFC technology are poised to surpass 200 million by 2009, but the investments in technical infrastructures required for ubiquitous service are steep.At the 2007 Wireless and Mobile Conference/RFID forum held in Toronto in July, Michael Bradley, VP Products at Visa Canada, said large-scale adoption of mobile and NFC payment services will take years to establish. "Upgrading merchants (from magnetic strip to chip technology) isn't going to be easy. We expect that project to cost, on an overall basis, somewhere in the range of $1 billion we expect it to take at least three or four years. Upgrading PoS is a key element for proximity payments, but it will happen over time." Fine-tuning the business model for carriers and credit card companies is equally challenging. "We're trying to determine what the optimal set-up is," explains Devata. "Based on what we've seen around the world, I think carriers are embracing the technology there's an accepted footprint in the area. We're trying to work with the carriers to develop the right solution for the hardware. We're trying to bring carriers and banks together too."While mobile payments efforts in many parts of the world are picking up steam, it appears that Canadians eager to use the technology are going to wait until the carriers here get on board.