CIBC promotes NFC payments via BlackBerry

By Elliott Holley

Canada’s CIBC bank has launched a novel promotion aimed at increasing uptake of NFC technology for mobile payments.

In collaboration with handset maker RIM, the manufacturer behind BlackBerry, and Canadian telco Rogers, the bank has placed a print magazine advertisement in Connected Rogers Magazine that contains an NFC tag developed by NFC specialist Crosscliq. Readers can tap the NFC tag contained in the advert to obtain a holiday gift offer. Users can also gain free BlackBerry apps, information on the new Blackberry 10 product range and the ability to make contactless payments using CIBC bank’s mobile app, called Sure Tap.

NFC and mobile payment technologies have been on the rise in recent years. NFC payment technologies such as Google Wallet allow customers to pay for goods and services simply by tapping their mobile device, rather than dealing with cash. The advantage is that the technology should reduce the need for checkouts, tills and queuing. Meanwhile, mobile payments have seen great success in emerging markets such as Kenya, where mobile payment service provider M-Pesa has 15 million users, in part due to its appeal among customers lacking a traditional bank account.

However, progress has been hampered in the developed world by the reluctance of many merchants and retail outlets to invest in the new technologies. In November 2012, Davide Steffanini, head of Visa Europe’s Italian operation, warned that the technology will be limited in its usefulness and may struggle to gain traction if customers cannot use payment innovations at the retail outlets of their choice.

The CIBC mobile payments app covers credit card purchases up to C$50. To use the CIBC mobile payment app, users must have an eligible CIBC credit card, a BlackBerry Bold 9900 or BlackBerry Curve 9360 handset enabled with NFC and a data plan with Rogers Communications and an activated NFC SIM card.

“Pay with the CIBC mobile payment app for credit card purchases up to $50 at thousands of locations including gas stations and grocery stores, all without ever having to reach for your wallet,” says the official CIBC documentation. “And, because your mobile purchases will be tracked on your CIBC credit card statement, it’s easy to keep an eye on your monthly spending.”

Despite the advantages, mobile payments have been undermined by an uptick in crime in recent months. In November 2012, the so-called ‘Eurograbber’ attack used malware to target the PCs and mobile handsets of users, carrying out automatic transfers that varied from €500 to €250,000, according to research by security vendors Check Point and Versafe. The malware included a bot attack known as the Zeus Trojan or Zitmo, which infected computers and mobile devices and enabled the hackers to intercept and steal the SMS messages sent by banks to their customers.

With the stolen transaction authentication numbers obtained by SMS, the criminals could then use the code to withdraw funds from their victims’ accounts. UK bank NatWest suffered a similar problem in September. In the case of NatWest, criminals stole money from customer accounts using ‘Get cash’, a feature of the bank’s mobile app. Get cash worked by letting customers use a passcode created by their online account to withdraw cash via mobile. Although NatWest subsequently withdrew the facility, financial crime and technology specialist NICE Actimize suggested at the time that the hackers likely used phishing emails to extract the code – meaning that withdrawing the app did nothing to solve the underlying problem.

For security, the CIBC app uses encryption technology to store customer credit card information on the chip of the smartphone. CIBC is based in Toronto, Canada, but also operates in the US, the Caribbean, the UK and Asia.

The partnership with CIBC comes as handset maker RIM is suffering from competition with Samsung and Apple for North American smartphone dominance. The company posted a net loss of $114m for the three months to 1 December 2012. In January, RIM agreed to pay rival Nokia $65m to settle a patent dispute between the two companies over wifi networking.