Research In Motion to provide wireless security technology to EnStream

TORONTO – Research In Motion (TSX:RIM) has struck an agreement to help manage security technology that will make it possible for many Canadians to pay with their smartphones through “mobile wallets.”

The BlackBerry maker said Monday it has been chosen by EnStream, a company set up by Canada’s three largest wireless networks, to provide the security infrastructure that would make the substitute for debit and credit cards at checkouts work.

Using a smartphone to make a payment is considered one of the next waves of wireless technology in North America, driven by the growing number of credit cards, rewards programs and identification that many people carry.

Under the agreement, RIM will manage security credentials for SIM cards in BlackBerrys and devices running both Google’s Android and Windows operating systems.

RIM’s Canadian managing director Andrew MacLeod said the technology will allow for seamless and secure payments at retailers for items ranging from gas stations to coffee and groceries.

“We think that the Canadian market is uniquely situated to probably be one of the early adopting markets for cashless or contactless payment solutions,” MacLeod said in an interview.

“We think this is the perfect opportunity for this type of technology to really get a footprint and get traction.”

EnStream is a joint venture between the country’s biggest wireless carriers — BCE Inc.’s Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T) — specifically to manage mobile payment technology. The service covers traditional plastic card payment methods, as well as gift cards and loyalty rewards programs.

The partnership ensures that when mobile phone payments rollout across the country, the three wireless carriers won’t be clashing with competing technologies that could sour consumers.

Last week EnStream sold Zoompass, a retail payments processing business that relies on a different phone-to-phone technology, to the Toronto-based funds tech company Paymobile Inc. for an undisclosed amount.

Aside from its mobile phone hardware business, RIM also owns technology for secure payments between consumers and retailers on mobile devices.

Newer BlackBerry smartphones, including the latest models in stores, have the ability to make mobile payments as do some phones using the Android operating system. The new iPhone 5, however does not have Near Field Communication short-range wireless technology to link to credit card information.

EnStream chief operating officer Almis Ledas said the company will have to wait until the next model of iPhone, likely due sometime next year, before it will be able to consider supporting encrypted payments on an Apple device.

“We intend to support the global platform standard for handset connectivity and if the iPhone has a Near Field Communication capability we’ll support it — if it doesn’t, there’s not much we can do about it,” Ledas said.

In the meantime, Rogers (TSX:RCI.B) and CIBC already have announced they will launch Canada’s first mobile payments system later this year, giving Canadians the ability to pay with their credit card using a smartphone.

Last month, Rogers CEO Nadir Mohamed said the company is also awaiting approval from the federal Finance Department for a credit card that would be available to its 9.4 million subscribers. It made the application just over a year ago.

Mohamed suggested the average Canadian carries 22 plastic cards in his wallet.

RIM already has technology in its BlackBerry 7 smartphones that allows the device to double as an access badge for buildings with secure entry systems in place.

The company is preparing to launch its more advanced BlackBerry 10 operating system and BlackBerry devices early next year, after numerous delays, though a specific launch date hasn’t been set. A touch screen version of the smartphone is expected to debut first, followed by a keypad variation of the device.

Last week, the company sent out an invitation to some of Ottawa’s key government officials for a sneak peek at the new BlackBerry operating system. The event is designed to drum up excitement on Parliament Hill where the BlackBerry remains the dominant phone.

RIM shares gained six cents to $7.75 in trading Monday morning on the Toronto Stock Exchange.