Canada’s mobile payment future is now centralized in Toronto

Last week, Toronto’s MaRS Discovery District launched its new financial technology hub, MaRS FinTech, to concentrate the innovation around mobile payments and alternate forms of lending led by Canadian startups.

The man in charge of leading this surge, Adam Nanjee, is a former VP of Business Development at MasterCard, and he sat down with BetaKit’s Douglas Soltys to chat about the future of FinTech.

Below is an edited transcript of that interview.

I would assume that a lot of these FinTech companies are also mobile companies as these devices become the hub for all sorts of transactions. Why is mobile such a primary focus right now?

Doug, mobile payments have been around for quite some time, especially in Canada around the whole NFC movement, etc. I think with the emergence of Apple Pay coming into the market, and the whole wearables movement, mobile payments or device-enabled payments is having a resurgence. A lot of companies are building specs for Apple Pay when it comes to Canada.

But I think to your point, we have all the major banks here, we have all the major Canadian telcos that have offices in downtown Toronto, we have all the major credit card networks that have offices in downtown Toronto, so I think you’re seeing that mobile and payments go hand in hand. You’re seeing that with Apple Pay and that’s also why we partnered with UGO too, right? There are a lot of devices out there that aren’t iOS devices.

One last point, I’ll tell you that we’ve had a lot of interest yesterday from some of the telcos, asking ‘how do we play in this space as well?’

Let’s talk about that. My compatriot Daniel Bader would say that, structurally, Canada is set up for a payments revolution technology-wise. When it comes to the business infrastructure, there is either legislation or corporate interest against the kind of connectivity that is needed for payment support. Because no mobile user wants to have ten wallets. So with the interest that you’re seeing from the banks and the telcos, are they willing to concede the need for participation rather than own an end-to-end solution?

I think there’s still that issue that you’ve mentioned around a truly mobile wallet. I think UGO has done a great job starting that movement, but you’re right, to have a truly open wallet you need to be able to put any card on any device in one particular wallet. There is still a struggle with the financial institutions amongst themselves, and the telcos amongst themselves.

I actually saw this, Doug, during our BlackBerry days, when we were all trying to figure out, ‘who’s going to take the stake?’ Is it going to be the credit card networks? Is it going to be the banks? Is it going to be the carriers? Who is it going to be? I think Apple, with Apple Pay, is on the right track. They’re saying, ‘we’re going to do this. Credit cards and banks, do you want to be onboard?’ And they’re helping to fund some of the merchant retail PoS terminals, and that’s truly the only way to get mass adoption.

Because you’re right, there’s still an infrastructure issue in Canada. We have a few mobile payment solutions in Canada already, but are our enterprises and retail outlets going to pay to upgrade their point of sale terminals to accept even NFC payments? Because a lot of them don’t have that today. So I think people are still trying to solve that ubiquity.

Bitcoin Decentral Toronto

That Interac level of ubiquity.

Yeah. I can tell you that we’ve seen a lot of interest from some of the other networks, Interac and a few others. Visa Debit has launched in Canada with quite a few products, and I think MasterCard debit is coming out as well. I think we’re going to see an emergence of the debit products come through.

In Canada, we’re unique. We have all these debit products, all these credit products, these carriers that play in different sandboxes – Rogers is a bank now. I’ll use an arbitrary example: will you ever see your Royal Bank Visa card in your Rogers Bank wallet? I don’t know, but to get to a truly open wallet, someone has to say ‘we are going to accept everything.’

So looking at this space in 2015, what’s the next shoe to drop?

I would say that of all the sub-categories within financial technology, I think we’re going to see a lot of announcements and new technology around cryptocurrency. Particularly from the startup side.

I have seen so many do many different platforms and technologies based off of cryptocurrencies. For example, we’re to a few companies that are building security exchanges using blockchain. We are seeing companies building online casinos using Bitcoin. MaRS is making a big bet that cryptocurrency will be part of the cluster in a big way. Outside of the currency fluctuation of Bitcoin, the technology behind it is very, very compelling.

One of the reasons why we partnered with Decentral Toronto, is that we want to educate the financial institutions about cryptocurrency and its true power.

An unabridged version of this interview originally appeared on BetaKit. Go read it.

Images courtesy Calvin Thomas.