Following the more widespread launch of Apple Pay in Canada earlier this week, Apple Pay VP Jennifer Bailey revealed more details about the launch in an interview with The Financial Post, explaining some of the reasons for the delay of the more general launch in Canada. A Canadian launch of the mobile payments service appeared to be on the horizon for last fall, with early reports from the Wall Street Journal pegging a November launch date, and leaked bank websites in October making many believe that a launch was imminent. Despite this, however, it had appeared to many that negotiations between Apple and the major Canadian banks broke down, and in the end Apple Pay launched in Canada on AMEX only.
Bailey noted that one of Apple’s challenges in bringing Apple Pay to Canada was the requirement for integration with Interac, the payment system used for debit cards and inter-bank transactions in Canada, noting that it basically required that Apple add “a new network to Apple Pay’s platform” which “takes new work for both Apple and the network itself.” That requires multiple parties to “build up this new network integration and do full testing.” The report notes that for the Apple Pay launch, the Interac Association had to develop its own Interac Token Service Provider (TSP) to generate secure encrypted tokens for transactions, in much the same way VISA and MasterCard did for the initial launch of Apple Pay. Interac’s vice-president of product and platform development, Avinash Chidambaram, explained that Interac has been working on this for a year and a half — basically since Apple’s original rollout of Apple Pay in the U.S., noting that the company has also “been working with Apple to educate them on the Canadian market [and] highlight our ubiquity” — unlike other countries, all debit card transactions in Canada operate through the Interac network, rather than the VISA or MasterCard platforms, making it a key requirement for a successful Apple Pay launch in the country. RBC’s executive vice president of digital, payments, and cards, Linda Mantia, suggested that Interac debit card support was mandatory for Apple Pay, explaining that although RBC wants to provide the solutions that its clients are looking for, “it’s been very important to consumer and merchant clients that both debit and credit be supported.”