The Canadian banking industry is currently one-year in to a long-term programme to replace mag-stripe cards with chip and PIN technology. Interac says the introduction of contactless payments will open up new territory for bank cards to replace small-ticket cash payments at the check-out.

"We have sought out and are leveraging the best technology expertise available globally," says Mark O'Connell, president and CEO, Interac Association. "By partnering with Inside, we will be able to incorporate fundamental policies, strong consumer protections, which is a vital tenet for the Canadian market, and key features, all of which are unique to Interac."

Shyam Krishnan, industry analyst at Frost & Sullivan says the cash replacement market has been difficult to penetrate in the past due to the lack of the right technology at the right price.

"The partnership between Interac Association and Inside Contactless goes a long way towards creating a viable solution, providing the technology and value proposition necessary to break the barriers to this market," he says.