PayPal Says First Mobile Credit Card Transaction Happened a While Ago

Last week Rogers and CIBC launched Suretap, a digital mobile payments service. Rogers claims it is the first such payment solution in Canada. This is true – it’s the first to utilize near field communications technology.

But Rogers also claimed that last week marked the first mobile credit card transaction in Canada. According to PayPal, this is most definitely untrue.

“We’re pleased to make history in mobile commerce in Canada by completing the country’s first mobile credit card transaction,” said David Williamson, a Senior Executive Vice-President at CIBC said last week.

“Making the first mobile credit card payment means that we are one step closer to allowing Canadians to store everything they need, securely, in their smartphone,” added David Robinson, Vice President of Emerging Business for Rogers.

But “Canadians have been able to use PayPal to pay directly from their smartphones … since earlier this year,” PayPal firmly counters. PayPal’s solution doesn’t use NFC, which is where the debate arises from. But many – including PayPal – argue that NFC shouldn’t even be the gold standard for mobile payments.

“NFC is simply a technology that enables communication between two devices that are close to each other,” PayPal affirms. “It is far from the Holy Grail for mobile payments.”

PayPal isn’t alone. Starbucks enabled mobile payments without the need for NFC last year and it has been tremendously popular in Canada, processing tens of millions of payments. And NFC is still not on some of the world’s most popular smartphones, including all of Apple’s iPhones, which limits the appeal.

Darrel MacMullin, managing director for PayPal Canada, wrote a lengthy piece on NFC being “so what?” technology. He differentiates between “mobile wallets” – which is what Rogers and CIBC are offering – and “digital wallets,” which exist in the cloud and can allow users to pay for goods without even touching their smartphones.

The debate is likely to continue through 2013 as other Canadian banks and telcos launch similar services to Rogers’. And that’s not to mention Square, whose Wallet is now expected to launch in Canada next year. It’s shaping up to be an interesting time in the mobile payments arena.