BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has made a deal with mobile payments firm EnStream to provide a secure platform for transactions between Canadian banks and consumers. A joint venture owned by telecoms Bell Canada, Rogers Communications Inc. (TSE:RCI.B), and TELUS Corporation (NYSE:TU) (TSE:T), EnStream will use the BlackBerry platform to handle payment card transactions for major financial institutions including Royal Bank of Canada (NYSE:RY) (TSE:RY), Toronto-Dominion Bank (NYSE:TD) (TSE:TD), Canadian Imperial Bank of Commerce (NYSE:CM) (TSE:CM) and Caisse Centrale Desjardins (CCD).
Mobile payments growing at 31% annually
“BlackBerry has proven through our decades of experience in enterprise mobility that we have the ideal infrastructure and security capabilities to protect users’ data when new capabilities such as mobile payments emerge,” said John Sims, President of Global Enterprise Services, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) in a statement. “Together with EnStream and partners like them around the world, BlackBerry can better reach customers and provide a complete solution for banks with opportunities in the mobile payments space.”
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has launched a similar service in Indonesia called BBM Money, and it looks like this could be a growing market for BlackBerry to take a lead in. The company cites a Gartner study that expects mobile payments to grow from $35 billion in 2012 to $173 billion in 2017 excluding person-to-person payments or mobile airtime payments. Even if it slows down from the 31% annual growth rate that Gartner is forecasting, the success of mobile computing makes mainstream mobile banking inevitable, and BlackBerry is smart to get out in front of the trend.
BlackBerry can build on a success in Canada
The EnStream deal gives BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) a head start by proving that it can handle the security requirements that come with connecting multiple financial institutions to consumers using whatever smartphone they want (in the past the company has kept its network secure largely by controlling messaging from end to end).
“We expect most major Canadian banks and mobile operators to connect through this platform to meet consumer demand for efficient and safe digital transactions,” says EnStream COO Almis Ledas.
This deal is good news for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) investors because it gives a clear direction for the company to go in the future that leverages its impeccable reputation for mobile security and doesn’t rely on it suddenly rebuilding the consumer base that it lost to Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) in recent years.