M-commerce fails to reel in retailers

Wireless cellphone payments face barrier

While the country's top cellphone carriers recently teamed up to prepare for the introduction of wireless payments, the concept doesn't yet appear to be high on the agenda of many consumer-focused businesses.
Compared with countries where so-called mobile commerce (m-commerce) is more advanced, Canadians use their cellphones to pay for only a few products or services, such as ring tones and parking. In contrast, consumers in Japan reach for their cellphones when they buy goods in convenience stores or vending machines, go to the movies, and even fly.
After adding camera, music, and TV features to cellphones, Canadian wireless companies have decided the time has come to transform wireless devices into wallets here, too. Two weeks ago, Bell Mobility, Telus Mobility and Rogers Wireless launched a jointly owned venture called Wireless Payment Services that will focus on creating a standardized system.
Dawood Khan, a partner at wireless consulting firm Kazam Technologies, says there are opportunities to use wireless payments for convenience where small change is required, and when consumers want to avoid lineups. "For a solution to be successful, it has to address both the retailer's needs and the consumer's needs."
A number of firms agree wireless payments could be interesting -- but it's not on their current agenda.
"It is certainly one thing we'd look at among other things," said Pat Marshall, a spokeswoman for movie theatre chain Cineplex Entertainment LP. The company wants to make it easier for customers to buy tickets, she said, pointing to plans to expand its on-line ticketing system as an example. "Our demographic is highly frequented by youth, and cellphones are a major focus of a youth's life."
At convenience store chain 7-Eleven Canada Inc., wireless payments are not on the horizon, according to company spokeswoman Laurie Smith. 
The same goes for Toronto's Beck Taxi. It's rolling out the Interac direct debit service in its taxi fleet, but has no plans for cellphone payments, according to marketing manager Andrew Whiteley -- although he's not dismissing it. "If it was a convenient application for the user and for us . . . then why not."
A major starting point for m-commerce in Canada will be when Wireless Payment Services introduces a system in the third quarter of 2006 that will let consumers use their cellphones to buy additional minutes with debit or credit cards, company president Jeff Chorlton says. He adds that multinational consumer-related businesses with operations here are already conducting pilots in other parts of the world. "They see commercial transactions going in this direction."
Nonetheless, there are hurdles for providers to clear before wireless payments start to gain traction among businesses and consumers. The carriers need to create an easy user experience, address security and privacy concerns, and price it attractively, according to a recent Kazam report.
In one of the few m-commerce experiments going on in Canada, Bell Canada and Coca-Cola Bottling Co., using technology from cStar Technologies Inc. and other firms, this year conducted a wireless payment trial at the Ambassador Conference Resort in Kingston.
The hotel's guests could buy Coca-Cola's juices and soft drinks using their room cards or cellphones. During the trial there was an increase in transactions at the vending machines, according to Allan de Paulsen, a Bell Canada executive.
"In terms of technology, it worked very well," added Alain Ayotte, director of cold drink operations for Canada at Coca-Cola Bottling. 
Coca-Cola is looking at different types of technology, including a system from cStar, which started developing wireless payment products for vending and other machines in 1998.
Mr. Ayotte said the company wants to do more trials of cellphone, room card and credit card payments next year in different venues. "We wish to see the real impact on the business and consumer response at more than just one location," Mr. Ayotte said.