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Apple Pay lands in Canada with a slow speed


Canada is now the third country where Apple Pay will work, if you happen to have exactly the right credit card.

Apple launched the mobile service just over a year ago in the US and brought it to the UK in July. With an iPhone 6 or higher or an Apple Watch, people can use Apple Pay to pay for items via short-range wireless connection at supported retailers.

Apple has been signing deals with a growing number of banks and retailers in the US to use the payment service, which has support from all four major US credit cards. To gain more traction, though, Apple Pay needs to expand globally, especially as rival services such as Samsung Pay and Google’s Android Pay start to make their presence known.

Canada is a step forward, but the initial support for Apple Pay will be limited. Neither Visa nor MasterCard will work with Apple Pay in the big North American nation. The agreement is solely with American Express, and even then, only Amex cards issued directly by American Express will support Apple Pay. Those issued by Canadian banks, such as Scotiabank, are excluded. Further, American Express represents only a small percentage of all credit card transactions in Canada.

“AmEx is a very small player, especially when you overlay the number of merchants that accept the card,” a source at a Canadian bank told Canadian news site The Globe and Mail. “You can’t really call it an entry strategy, but it’s an interesting deal with AmEx.”

The initial group of retailers in Canada that will recognize Apple Pay includes McDonald’s, Staples, Tim Hortons and Petro-Canada.

In April, Apple had reportedly been negotiating with Canada’s six largest banks about a November rollout of Apple Pay, people familiar with the matter told The Wall Street Journal at the time. But to get going in Canada, Apple had to bypass those banks as well as the other major credit card companies because “negotiations were dragging,” sources told The Globe and Mail.

Apple has apparently faced trouble branching out into other countries in large part because of its transaction fees. In the US, it reportedly gets a cut of 15 cents for each $100 Apple Pay transaction. Banks in countries such as China and Australia seem to be balking at those transaction fees.

The company confirmed Tuesday that it now has signed up two more major consumer banks in the UK, as earlier noted by the blog Ars Technica.
American Express is at least giving Apple an entry point into certain regions. Apple Pay will roll out to Amex cardholders in Australia, possibly this Thursday, before launching in Spain, Singapore and Hong Kong in 2016.

Owners of the iPad Pro, iPad Air 2, iPad Mini 3 and iPad Mini 4 can also make in-app purchases using Apple Pay.

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