Rogers Communications is hoping to expand beyond the telecom business by expanding into financial services, focusing on credit and payment services.
The owner of Canada’s largest wireless telephone service provider has told the federal finance department that it will apply to become a financial institution called Rogers Bank, to be headquartered in Toronto.
There are no plans to expand beyond that area into a full-service deposit-taking bank, a Rogers spokswoman said an e-mailed statement.
“We routinely explore opportunities to strengthen our position as a leader and innovator in the communications industry,” Rogers spokeswoman Carly Suppa wrote.
“The licence, if granted, would give us the flexibility to pursue a niche credit card opportunity to our customers should this make sense at a future date.”
Iain Grant, managing director for market research and technology firm SeaBoard Group, said Rogers could be positioning itself to become a leader in mobile money transfers.
That would enable Canadians to store credit in their cellphones, which could be used to make payments and money transfers, Grant said.
“The next big thing in mobile is money transfer, whether that’s me paying for a subway pass or a parking meter, or me sending you money or me sending money back home,” Grant said.
“Money transfer is where the cellphone companies stand to make their next trillion dollars.”
He said that will give competition to credit and debit card companies and to the larger commercial banks, to the extent that fewer people will use automatic teller machines for transactions.
Rogers needs to either partner with a bank or become one if it wants to provide the technology, Grant said.
If Rogers does establish its own banking unit, it would join other companies that run non-traditional banks including Canadian Tire and the President’s Choice Financial products offered by Loblaw.
The order to create Rogers Bank would need to proceed through the Bank Act’s normal application review process and the Minister of Finance. Suppa said the approvals process could take more than a year.
Anyone objecting to Rogers entering the banking business may submit an objection in writing to the Office of the Superintendent of Financial Institutions before Oct. 24.
