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What does UnionPay’s Canadian QuickPass rollout mean for competitors?

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August 17, 2016

UnionPay's mobile QuickPass is debuting in North America

UnionPay’s mobile QuickPass is debuting in North America

UnionPay is bringing its mobile QuickPass platform to Canada, enabling a slew of merchants to accept its contactless payments without requiring a customer’s signature or PIN number, adding yet another major competitor to the digital payments space.

The Chinese bank card organization is permeating North American markets with the Canadian rollout of mobile QuickPass, which is currently accepted at more than 220,000 point-of-sale terminals in Australia, South Korea, Hong Kong, Taiwan, Singapore and Macau. Although the mobile payments space is rife with a plethora of consumer-friendly options, the sheer global reach of UnionPay will likely help mobile QuickPass make a splash in Canada – if merchants effectively advertise it.

“UnionPay is the third-largest payment network in the world, behind Visa and MasterCard, so any market entrance should likely be deemed as significant,” said Jon Squire, founder and CEO of CardFree. “That said, it appears that there are roughly 70,000 merchant locations that can accept UnionPay as an option, but the real question – as we’ve seen with some many ‘Pay’ rollouts – is, are the merchants ready and incented to promote UnionPay at the point of sale?”

Heading northwest
UnionPay is venturing to Western markets and preparing for a more widespread North American debut by rolling out to Canada first. Thousands of Canadian merchants – such as retailers, supermarkets, hotels, convenience stores and restaurants – now accept UnionPay’s mobile QuickPass.

This means that Canadian consumers can complete seamless transactions at contactless terminals using their QuickPass-enabled mobile devices or chip cards. If the purchase is less than $100 Canadian dollars, no customer signature is needed for those paying with a debit card.

Credit-card users with purchases under $100 Canadian dollars will not need to verify the transaction with a PIN number or signature either.

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Mobile QuickPass in action

These standards are in accordance with an international practice set forth to limit micropayments for contactless transactions, thereby maximizing card-using security.

Mobile QuickPass supports offline payments made with smartphones as well as online payments. The platform is compatible with many smartphone models and brands, including Lenovo, Huawei, ZTE and MI.

More than 85 percent of Canada’s local ATMs – as well as 70,000 merchants – now accept UnionPay cards.

UnionPay has issued over two billion chip cards worldwide, with more than seven million point-of-sale terminals supporting mobile QuickPass.

Evolving mobile markets
The last several months have brought about numerous new competitors into the digital payments space, while longstanding brands have introduced innovative solutions as well.

PayPal’s Venmo is now a major competitor in mobile payments with the launch of its checkout service on retail apps that features innovative sharing capabilities and follows a successful year marked by 140 percent growth (see story).

Mobile wallets are slowly gaining adoption, but retailers’ offerings are currently the winners because they can be easily integrated with loyalty programs, providing an incentive to use them (see story).

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QuickPass has already seen widespread usage in Asian markets

UnionPay’s mobile QuickPass will need two key aspects in order to achieve wide-scale user adoption.

“To compete you need two things: market penetration and consumer utility that goes above and beyond what is already in market with the other Pays and current ecosystem,” Mr. Squire said. “Both seem to be a to-be-determined from this announcement and only time will tell what UnionPay brings to the party (in the form of services) that the others have not.”

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Alex Samuely is staff writer on Mobile Commerce Daily, New York. Reach her at alex@mobilemarketer.com.

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