CIBC hopes to steal clients with mobile wallets TORONTO (Reuters) - Canadian Imperial Bank of Commerce is hoping its deal with Rogers Communications to allow customers to pay for purchases with smartphones will help it steal clients from banking rivals who must now rush to match the offering. Canada's No. 5 bank announced the deal on Tuesday for the so-called "mobile wallets," which will allow the bank's credit card customers to make retail payments by tapping their smartphones on a sensor. The move came a day after Canada's banking industry published a set of guidelines to support open standards for mobile wallets. With banks clamoring to offer competing products, CIBC sees value in being the first off the mark. While the service will not be in place until later in the year, CIBC seems to be in the best position to get its mobile wallet off the ground first. "There's no doubt we wanted to be early on this, we wanted to be first," David Williamson, CIBC's head of retail and business banking, said in an interview. We want more clients, and there's evidence that clients will gravitate to a bank that is innovative or leading. Canada's banks are scrambling to build domestic market share as an expected housing slowdown threatens to put a squeeze on consumer lending volumes, which are the banks' leading revenue driver. While CIBC's larger rivals all have significant international operations to churn out growth, CIBC is more domestically focused. Williamson noted CIBC was the first Canadian bank to offer mobile banking back in 2010, and said customer take-up of the service has been brisk. He expects a similar rush to mobile wallets and expects customers gained will stick around even when other alternatives emerge. "The attrition rate for clients who do online banking or mobile banking is much lower, so the loyalty level... is a lot higher," he said. David Beattie, an analyst at Moody's, said offering mobile wallets first would benefit CIBC, but that maintaining the advantage will be a challenge. "I think that being first mover on mobile wallets would be positive, but transitory, as the industry moves to this next level of payment convenience," he said. A sustainable advantage here is unlikely. Williamson said he expects to add debit cards to the service at a later date. He said credit cards were the logical starting point due to CIBC's market-leading market share and because more retailers have credit-card terminals able to scan the phone sensors. Bank of Montreal, Canada's No. 4 bank, said it expects to be in the mobile wallet business within 12 to 18 months, while No. 3 lender Bank of Nova Scotia said it will be announcing its plans at the "appropriate time." Royal Bank of Canada and Toronto-Dominion Bank, the country's two biggest banks, would not comment on their plans to offer their own products. Additional reporting by Alastair Sharp; Editing by Peter Galloway