CIBC Quits the Mobile Payment Race

It's inevitable that, at some point, any market becomes too full of competitors to survive. Competition ensures that some businesses will get more market share than others, and that means some businesses won't get enough to sustain operations. CIBC is one such company, having removed its CIBC mobile payments app from Google Pay as it discovered its customers preferred other brands.

CIBC's app allowed users to simply tap their smartphones against a payment terminal to make purchases, but even this contact payments system wasn't enough to break customers away from alternatives like Samsung Pay and Apple Pay. CIBC didn't get rid of all its mobile presence, however, leaving the CIBC Mobile Banking App in place. With CIBC's mobile banking users can make bill payments, transfer money from one account to another, and carry out a variety of other functions.

This is something of a distressing development; CIBC was a major presence in the Canadian mobile payments industry. CIBC departing the field in the face of non-banking names doesn't bode well for the remaining bank-based mobile payment systems. It will be interesting to see if other Canadian banks cut and run as well or stick it out.

It was inevitable that some mobile payments systems had to cut out, though we haven't seen much of that happening so far. LG Pay was out for a while before it came roaring back like it had never really left. Having a mobile payments app in place almost seemed like a good way to make a little extra cash in payment processing, but apparently CIBC didn't think the return was worth the investment.

Given that CIBC had other options on hand and was already seeing customers move toward other payment platforms, their departure probably wasn't a bad idea. After all, we knew banks were late to this party, and trying to break away entrenched users just doesn't go well. Still, there's room for the banks here too; many mobile payment systems depend on a debit or credit card, and that's the thing the banks do best. It may be too late for the banks to get in on mobile payments, but the picture isn't completely gray for them here.