Evidence of meeting #19 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Martha Hall Findlay  Chief Legal Officer, EnStream
Cameron Schmidt  General Manager, PayPal Canada
William Giles  Vice-President, Emerging Payments, MasterCard Canada
Carolyn Burke  Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada
Derek Colfer  Head, Mobile Innovation, Visa Canada Corporation

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Yes.

4 p.m.

Head, Mobile Innovation, Visa Canada Corporation

Derek Colfer

There were no NFC commercial deployments in market then. To date there are two. There is one with RBC, as we've heard, and there is one with CIBC. For both of those there are no incremental costs. So it may have been too early when Mike responded to that, but to date there are no incremental costs.

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

So if there is an interchange rate of 1.7% on a plastic card, that's going to apply to my mobile payment. So as a small-business owner, when the consumer taps that then I'm going to be paying 1.7% as a small-business owner, if that's my negotiated rate, correct? There will be not another 0.02% for having a mobile payment.

4 p.m.

Head, Mobile Innovation, Visa Canada Corporation

Derek Colfer

Correct, to date payWave is payWave. I think when Mike responded to that the reality was there were no commercial launches in market, and we have two now, and it remains payWave is payWave. There are no incremental costs for a merchant.

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Thank you, sir.

To Mr. Giles, during the same study at the industry committee, MasterCard said there was most likely going to be a payment, an extra fee on top of that. Has that changed, or has there been a fee added through MasterCard on any type of their mobile payments?

4 p.m.

Vice-President, Emerging Payments, MasterCard Canada

William Giles

The pricing remains the same, no matter what the form factor.

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

So just to clarify, if it's a MasterCard and the swipe fee on that is 1.7%—to make sure that they're both the same between Visa and MasterCard here—there would be no other fee on top of that. So small-business owners and medium-sized business owners don't have to worry about all of a sudden saying, I'm going to take mobile payments, but my 1.7% will now be 2%, because there's an extra fee on top?

4 p.m.

Vice-President, Emerging Payments, MasterCard Canada

William Giles

It will remain at 1.7% if that's what they're currently paying for a standard card.

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Excellent. Thank you.

How much time do I have?

4 p.m.

Conservative

The Chair Conservative James Rajotte

You have 30 seconds.

4 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Very quickly, the safeguards that are in place—I believe, Ms. Burke, you talked about that briefly—against fraud, identity theft, inaccurate tax reporting, I think would be three things we'd like to know about.

4 p.m.

Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada

Carolyn Burke

All of those are included in the solution.

If I may, Mr. Thibeault, I'd also like to add that with the RBC Secure Cloud solution, the mix the merchant currently experiences with Interac debit and credit will remain the same. Interac Flash, which our consumers use at point of sale, is free of charge for consumers.

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Thank you, Mr. Thibeault.

We'll go to Mr. Saxton, please, for your round.

February 13th, 2014 / 4:05 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Thank you, Chair, and thank you to our witnesses for being here today.

As I'm a former banker this subject is very interesting for me. I think mobile payment is probably the greatest innovation in banking since the invention of the ATM back in the 1970s. I think it has huge potential. We're also seeing that there's still a generational gap between the users. Younger people seem to be embracing the new technology a lot quicker than the older people. What I find interesting today is that younger people don't even use cash; they pay for everything with plastic. Most of it's debit though, not credit. The older people such as me, our generation, still use credit cards, and still use cash for small-ticket items.

What are you doing to bridge that generational gap? I know back in the 1970s when ATMs were invented it was exactly the same thing. The younger people used them first, and the older people still preferred to go to the wicket and talk to the teller. What are you actively doing today to help bridge that generational gap?

Maybe Visa would be the best place to start.

4:05 p.m.

Head, Mobile Innovation, Visa Canada Corporation

Derek Colfer

You caught me off guard. You were pointing at—

4:05 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Sorry, I always get Visa and MasterCard mixed up.

I have both in my wallet, by the way.

4:05 p.m.

Head, Mobile Innovation, Visa Canada Corporation

Derek Colfer

Well done.

We've certainly spent a lot of time with consumer focus groups doing qualitative and quantitative research on who is going to use this. You have what everybody refers to as the early adopters. The demographic for the early adopters, certainly in our research, has been pretty exciting. Because you have those early adopters, and usually the demographic for them is the youth, as you say, but there are a lot of early adopters out there who are my age, who are my parents' age. We've found that really refreshing. We've actually seen a lot of folks who wouldn't necessarily fit the profile, if you will, engaging with these technologies a lot sooner than we had anticipated.

So we're very excited about that.

4:05 p.m.

Chief Legal Officer, EnStream

Martha Hall Findlay

If I can jump in with just a couple things, I've been in the wireless business since very close to its beginnings, when a cellphone was this big, and there were maybe 10 people in the country who had them. They're everywhere now, among all ages. In a relatively short period of time people have embraced that technology.

One of the things we're really excited about is that with this layer of security that we have now, that we're all talking about, the opportunity is massive. Because it's not just payments. It is government identification, driver's licences, health cards, loyalty cards, gift cards, couponing, and my personal favourite, hotel room keys. When I was telling somebody that just the other day, a young person who was talking about the generation, he said, “You know, it's the hotel room key. My parents use their phones a little bit, but guaranteed, if their hotel room key is loaded on the phone, they'll be thrilled because they won't have to wait in a line to check in.”

I think there are some applications that are going to cross generations that are really exciting.

4:05 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Those are uses that I hadn't even thought of.

4:05 p.m.

Chief Legal Officer, EnStream

Martha Hall Findlay

Oh, they're pretty exciting things.

4:05 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

I lived in Singapore in the late 1990s, and the biggest thing in Singapore at that time was the stored value card. Mondex was one of them—I think MasterCard owns Mondex today—and it was huge. But it never seemed to catch on in Canada.

Are we leap-frogging that technology and going straight to mobile—we're not even going to go through that stored value card?

4:05 p.m.

Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada

Carolyn Burke

One of the reasons that did catch on in Singapore during that time is that they also used it for transit applications. Many of the stores that surrounded transit also took it, so it became an inevitable part of daily life. As payments roll out, other applications that are also compelling will cause different groups to be able to switch to mobile.

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

You have one minute.

4:05 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

With the use of mobile we're going more paperless. Are we seeing some real savings in cost as a result of that?

That's to anybody who wants to answer.

4:05 p.m.

Chief Legal Officer, EnStream

Martha Hall Findlay

There are huge cost savings. Imagine when you are issuing a credit card or gift card, or you walk into a grocery store and there's a whole row of gift cards that you can buy, when you can deliver those over the air in soft version.... There's the whole cost of producing plastic cards, of stamping them, and in the case of the credit card, the requirement to stamp it with the chip, put it in an envelope, send it to somebody, and then of course, when the expiry date comes, another card has to be issued. The cost savings in being able to download those credentials over the air in real time, no paper at all, no mailing, no distribution, can be really quite exciting.

There is a payment piece, but a lot of participants looking at some of the other applications are looking at terrific cost savings, yes.