Mobile Payments Perspective with CIBC’s Todd Roberts, Senior Vice President of Business Innovation and Growth Card Products

Navigator Edition: July 2012
By: David Woynerowski

Todd Roberts 06_cropRecently we had the opportunity to speak with Todd Roberts, Senior Vice President in the Cards Products Division at the Canadian Imperial Bank of Commerce (CIBC), about CIBC’s mobile payments strategy. In this Q&A format, we cover topics such as the outlook for mobile payments in Canada,  trends in the payments market,  and mobile payment experience for CIBC customers.

Todd Roberts is responsible for Business Innovation and Growth, with a focus on emerging payments business models.  Todd joined CIBC in January 2012.  Prior to joining CIBC, Todd led the Corporate Strategy practice in Canada at Deloitte and led the North American Financial Services practice at Monitor Group for over ten years.

1. How does CIBC view the overall mobile payments opportunity in Canada?

CIBC’s view is that mobile payments will be transformational for the payments landscape. As with any significant innovation, there will be an adoption curve where usage will build steadily and then accelerate more rapidly.  Mobile NFC payments are constrained in the near term by limited handset availability, merchant acceptance, and overall consumer adoption, but will be a major force going forward.

We see incredible value in what the mobile form factor can offer consumers as value-add to payments (e.g., location based offers via GPS in phone, storing of Digital ID in the Secure Element, etc.).  While payments will remain at the core, we see potential to offer services above and beyond Point of Sale NFC payment capability that will dramatically enhance the overall customer experience.  With rapid expected growth in smartphone penetration in Canada, alongside expected growth in e-commerce conducted via mobile, the potential for all types of mobile payments is significant.  Mobile payments will become even more relevant in 2014 as merchant and consumer acceptance grows alongside a multitude of solutions entering the marketplace.

2. What does CIBC believe its customers’ needs are related to mobile?  (Are you specifically interested in retail POS payments, or more generally interested in mobile as a bank interaction channel?)

CIBC believes its clients value both convenience and security as it relates to banking and/or payments, regardless of channel, and the mobile form factor is no exception. CIBC wants to provide the convenience of mobile NFC payments and has adopted the SIM Based Secure Element model in addition to internal measures to ensure the privacy and security of our customers is maintained.

As the first bank in Canada to launch a mobile banking app, CIBC has established a leadership position in delivering mobile financial services to clients. While both mobile banking and mobile payments are expected to grow rapidly, CIBC’s main interest lies in ensuring relevance of our bank in helping clients manage their finances and in offline and online purchase activity.  CIBC wants to be at the forefront of the pre-purchase, purchase, and post-purchase customer experience by offering our clients best-in-class services.

3. What will be the key features of the wallet and how will it be differentiated relative to future offerings from banks and non-banks?

Payment functionality will be at the core of the digital wallet with near term functionality centering on payment credential registration. POS payments will continue to gain momentum via NFC technology, barcode cloud-based solutions, etc. The storing of loyalty program cards and earning upon purchase will likely follow, with future functionality enabling loyalty point redemption at check-out (either POS or via e-commerce).  Given the federal government’s efforts and focus on enabling a digital economy to benefit merchants and consumers, digital ID is also likely to emerge in Canada.

At this time, the pace of other value added services such as receipts, shopping tips, etc. is uncertain.  Couponing as a complement to mobile payments may appear sooner than later to incent consumers and help accelerate consumer adoption.

4. Will CIBC’s wallet enable payment credentials from other brands?  Will there be any restrictions on what can be loaded in the wallet?

CIBC’s wallet will not exist in an open format for inclusion of other credential providers in the near term. CIBC’s current solution is embedded in apps that are proprietary.

The longer term direction is to offer an open wallet solution that can store any card brands and/or wallets. We expect merchant acceptance marks (PayPal,, MasterCard PayPass) to be an important driver of wallet sign up (i.e., cannot complete one-click checkout unless registered).

5. What benefits and challenges does CIBC expect from being early to market with an NFC wallet?

Being first to market enables CIBC to drive leadership in innovation while enabling great opportunities for “learning by doing.”  These learnings can help shape future strategies and position CIBC’s solutions for success.  CIBC has received significant interest from both merchants and consumers on the mobile payments offering, which is key to unlocking the potential for acceptance and adoption.  The recent announcement of CIBC’s mobile payment initiative has made implementation easier by facilitating open communication with both internal and external partners.

While there are many benefits in being first to market, it does not come without its challenges.  Although Canada is recognized as a global leader in readiness to adopt mobile payments, the ecosystem is not fully equipped to support mobile payments in Canada.  Given that there is still limited mobile NFC payments acceptance, limited number of supporting handsets, and by being first to market, CIBC will need to work at initiating and gaining consumer adoption.  CIBC will need to educate consumers on the convenience and security that mobile payments provide.  Additional challenges include working through the business model and knitting together the various stakeholders involved: mobile network operators, handset manufacturers, payment networks and banks. Having led the industry on past mobile initiatives in banking and stock trading, and drawing on our leadership in payments, CIBC is well positioned to respond to these challenges.

6. How is CIBC planning to market and distribute the wallet to its customers?  What will the acquisition experience be from a consumer perspective?

CIBC will make its NFC Wallet available at launch to all customers with qualifying handsets on the Rogers network.  We intend to offer immediate downloads of the application and provision the cards OTA in near real time. We plan an innovative marketing campaign. Our public announcement of our solution in May 2012 led to significant media coverage across Canada, a strong indication of the interest in mobile payments capabilities and a meaningful step in communicating to Canadians that the era of mobile payments has arrived.

For more information, please contact David Woynerowski, Partner specializing in Card Issuing with a focus on the Canadian market,; or Paul Grill, Partner specializing in Mobile Commerce and Emerging Payments,

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