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Apple is preparing to launch its NFC-based mobile payments service in Canada this fall, a Friday report says, marking the first time Apple Pay would be officially offered outside of the United States.
Apple is reportedly in discussions with Royal Bank of Canada,Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada, according to the Wall Street Journal. That group makes up the top six largest banks in Canada.
The iPhone maker is said to be targeting a November launch, but negotiations have not gone smoothly. Canadian banks have balked at Apple's "onerous" fee-sharing proposals, and are worried about customer authentication problems that have plagued their U.S. counterparts.
Apple could be asking for fees as high as 25 basis points per transaction, compared to the 15 basis points it takes from partners in the U.S.
To address security issues, the Canadian banks have banded together and asked consulting firm McKinsey & Co. to identify new account security options that could include "secondary authentication" mechanisms. Many U.S. banks have adopted similar provisions — Â such as requiring users to log into a mobile app or enter a PIN code when adding a card to Apple Pay — Â while others require customers to call the bank's contact center personally.
Apple is also believed to be pursuing a deal to launch Apple Pay in China, but is reportedly running into similar issues.
In a separate report, the Journal indicated that banks may also be worried about so-called "disintermediation." They feel that Apple may usurp their relationships with their customers, making retention more difficult.