Mobeewave combined two Canadian staples — hockey and contactless payments — to test a technology that allows smartphones to pay 'each other,' and is now taking the concept on the road to other markets.
Following a pilot at the annual Road Hockey to Conquer Cancer fundraiser, the Montreal-based mobile technology company now plots a 2016 commercial rollout of its technology in Canada, U.S. and Europe, where a much larger market will test Mobeewave's argument that prevailing mobile wallets are too one dimensional.
"All of the wallets have the ability to pay and send cash out to pay merchants, but why not use the technology to make the wallet a payments acceptance venue as well?" said Maxime de Nanclas, the COO of Mobeewave, who cofounded the company in 2011 along with CEO Benjamin du Hays.
The company has been developing its technology for several years and has received a handful of patents.
Mobeewave's product enables payments between Near Field Communication-equipped phones, so the accepting phone does not need a dongle or a mobile card reader. NFC-equipped devices can also accept payments from contactless cards.
In this summer's pilot, which Mobeewave conducted with Global Payments and Visa, staff from the Princess Margaret Cancer Foundation used NFC phones to collect donations from players registering for the hockey tournament, which attracts more than one hundred teams and thousands of players in Toronto.
"Canada is a contactless market," de Nanclas said. "People are used to tapping their card, so it's a good place to start."
The next step is a person-to-person payment service, which is often the foundation for larger mobile payment deployments. "Consumers have a familiarity with P2P," de Nanclas said.
For its broad rollout, Mobeewave hopes to partner with banks and wallet providers, which would offer Mobeewave as payment acceptance option. The vendor will charge a flat transaction fee in the U.S. and Canada, though it will use a different fee model in Europe.
De Nanclas considers companies like Square, for example, as potential clients which can use P2P as a gateway to selling other services.
But many of these companies are already developing P2P systems of their own. Apple, for example, is trying to build a P2P service in partnership with banks. Some of these same banks operate clearXchange, a P2P venture that is branching out to other services. And PayPal is looking to extend the success of its Venmo P2P app.
Apple Pay is a new presence in Canada, where it launched last week with Amex as its only issuer partner.
Mobeewave hopes to encourage broader adoption among consumers and merchants by making it easier to accept contactless payments, which would position it well as a partner or a competitor.
"Apple Pay's [uptake] is not that great, and the No. 1 reason is acceptance—there's not a lot of merchant acceptance in the U.S.," de Nanclas said.
While enabling transactions to move directly between mobile phones has proven successful in emerging markets such as Kenya, where the MPESA model uses airtime minutes to facilitate transactions, the use of P2P as springboard to broader mobile payment is a challenging strategy, according to Nick Holland, a financial services technology researcher.
"What is interesting to me is how P2P is seen as a Trojan horse for getting critical mass on the consumer side and then pivoting to consumer-to-business in the physical world," Holland said. "Thus far, I have not seen much evidence of this happening. Consumers do have some desire to use such a service. Look at the success of Venmo with millennials, but it tends to be where the mobile service is somehow more expedient, where there is real time funds availability, or where there is no other cash transfer alternative."