January 5, 2016
Payments solution provider Elavon says it is among the first payment processing companies to offer Apple Pay to Canadian businesses.
Elavon is wholly owned by US Bancorp and provides end-to-end payment processing solutions and services to more than 1.3 million customers in Canada, the United States, Europe, Mexico, Brazil and Puerto Rico.
Apple Pay works with current Elavon EMV-contactless point of sale terminals in Canada. To pay, consumers simply hold their mobile device near the contactless reader, exactly as they would a contactless card today. The payment information is then passed to the POS system once the consumer confirms the transaction using Touch ID on their device.
Security and privacy is at the core of Apple Pay, and when a consumer adds a credit card to Apple Pay, the actual card numbers are not stored on the device, or on Apple servers. Instead, a unique device account number is assigned, encrypted and securely stored in the secure element on the device. Each transaction is authorized with a one-time unique dynamic security code.
Mia Huntington, Vice President of Elavon in Canada, said in the press release, Elavon has been an early supporter of mobile payments, and Canadians continue to demonstrate their interest in adopting new payment technologies. Along with the increasing consumer demand for contactless payments, Elavon and Apple Pay enable businesses to offer the convenience their customers expect through their preferred method of payment including their iPhone, iPad or Apple Watch."
With an existing presence in the US and the UK, Apple Pay launched its service in Canada on November 17 with support from American Express. The agreement is with American Express alone, and even then, only AmEx cards issued directly by American Express will support Apple Pay. Those issued by Canadian banks, such as Scotiabank, have been excluded.
The partnership with American Express does not seem to be the best arrangement for Apple Pay either as AmEx is the smallest player among Visa and MasterCard, having 70 million cards issued vs. 4 million from AmEx. It is not surprising AmEx was keen to partner with Apple Pay for a soft launch as the card issuer had a significant issue maintaining and expanding its market share, especially after it did not renew the contract with Costco Wholesale Ltd. for the next period, and lost to Citi the opportunity to earn $100 million annually from Costco accounts starting 2016.
The initial group of retailers in Canada that recognize Apple Pay includes McDonald's, Staples, Tim Hortons and Petro-Canada.
As a reminder, Apple Pay was launched in October 2014 and has since then been a controversial topic for discussions with different predictions on the future of the service. However, the service confidently expands its adoption both in the US and the UK, where it was launched in June 2015. Apple Pay worked with 70% of credit and debit cards in the UK including Halifax, Lloyds Bank and the Bank of Scotland; 250,000 locations in the UK have started accepting Apple Pay since July, including major merchants and Transport for London (TfL). Apple Pay already supports cards that represent around 90% of the credit card purchase volume in the US.