Apple Inc. is planning to launch its mobile payments service in Canada this autumn, marking the start of its international expansion of Apple Pay, according to people familiar with the matter.
The company AAPL, -1.13% is in negotiations with Canada’s six biggest banks about a potential November launch of the service which would enable mobile payments for both credit and debit cards using iPhones and the forthcoming Apple Watch, those people said.
The banks are open to an agreement, but they aren’t happy with Apple’s fee proposals and are concerned about security vulnerabilities like the ones that U.S. banks experienced as they rolled out the service, the people said.
Lenders in discussions with Apple include Royal Bank of Canada RY, -0.96% , Toronto-Dominion Bank TD, -0.78% , Bank of Nova Scotia BNS, -0.15% , Bank of Montreal BMO, -0.73% , Canadian Imperial Bank of Commerce CM, -0.56% and National Bank of Canada NBC, +4.86% , the people said. Together, those banks account for more than 90% of retail bank accounts, which could provide Apple with near ubiquity upon launch if final agreements are reached.
Canada is an attractive market for Apple Pay because of the high level of iPhone market share. Research firm Catalyst said iPhones account for about one-third of the Canadian smartphone market, compared with the iPhone’s roughly 20% share globally. Additionally, unlike in the U.S., the vast majority of Canadian merchants are already equipped with machines that accept contactless payments through near-field communication, a prerequisite for Apple Pay.