Apple Pay is now available in Canada, the third country to adopt the mobile payment system.
Starting Tuesday, Amex users will be able to scan their card or enter account details into the digital wallet on their iPad, iPhone and Apple Watch.
Users will be able to hold iPhones and watches up to in-store contactless payment terminals, which will send encrypted data to the merchants and record the transaction in the user’s app. Apple Pay will also be available for online purchases made through iPads and iPhones on apps including Domino’s, Starbucks and Groupon.
However, Apple Pay’s long-rumoured entry will be limited to American Express cards, which are used in just two per cent of Canadian payment transactions. It is also only available for the newest iPhone models such as the 6 or 6S.
That means Apple Pay will not immediately be the great unifier that observers have said is necessary for wider adoption of mobile payments in Canada. The company declined to comment on whether it is working on bringing other partners on board, but suggested it wants to bring the system to as many Canadians as possible.
Apple Pay launched in the U.S in 2014 and earlier this year in the U.K. It is now available in some 1.5 million stores in the U.S., though reports of its adoption have been mixed.
About 83 per cent of Americans who could use Apple Pay have not tried it, while it was used in just five per cent of eligible transactions in the most recent quarter, according to an October survey by Pymnts.com.
The exclusive deal with American Express allowed it to sidestep negotiations with Canada’s Big Five banks, which issue MasterCard and Visas.
American Express acts as its own credit card issuer in Canada. It has a partnership with Scotiabank, but those cards are not covered in the agreement.
The partnership gives American Express exclusive multi-country access to the much-hyped product at a time when it is losing ground as the premium card of choice.
Some analysts have suggested the interchange fees merchants have to pay to the card-issuing banks could have been a sticking point in negotiations between the banks and Apple.
The tech company charges its own fee of 15 cents on a $100 transaction, which could complicate a recently mandated 1.5 per cent cap on interchange fees for Visa and MasterCard purchases at a time when banks are struggling to shore up revenue.
The big banks are also working on their own mobile payment systems, none of which are available to iPhone users.