Human hand with smartphone paying for order in cafe with help of swipe system Human hand with smartphone paying for order in cafe with help of swipe system
William Keliehor
Chief Commercial Officer - Interac

The Digital Payments Revolution in Canada

Published on

Takeaways

  1. Canada’s pro-consumer regulations help ensure that digital payment and open banking systems will always put the customer’s security first.
  2. For SMEs to fully capitalize on the potential of digital payments, the finance industry must become more accessible to these businesses.
  3. The digitization of government services has become more crucial than ever, with the potential for open access wallets to be introduced in Canada.

Action

With governmental bodies in Canada already working to drive the evolution of digital payments in the country, consumers and citizens must continually use their voices to petition government for improvements to infrastructure, safety and security.


Does Canada need a revolution in digital payments?

Yes, a good revolution will be good for Canada. Revolution can also be an evolution, and that is what we are currently experiencing in Canada. 

The evolving post-pandemic world is really focused on the digitalization of everything and payments are a critical component of that. What is needed more than anything is quicker access to money. One of the basics of economics says the more money gets around, the more people get to facilitate the stimulation of the economy. The digitalization of payments is a good thing because it gives more people access to money faster and it provides better data. This gives us a better opportunity to leverage that data to make better decisions.


What is open banking and how should we be implementing it in Canada?

Open banking is a way of providing open access to data or providing better access to data. As we all know, data is a currency and we have to protect our data and our public persona. There is an evolution of different views of data and how, when and for what that data can be accessed. 

“The Canadian government has been very protective and is working feverishly to evolve regulations to protect people’s access to data.”

Open banking is a bit of a buzzword. It is more about open access to data. For the next evolution of open banking, regulators and anchor institutions should look at how they can protect, secure and better use data to benefit people and the economy. It is a big responsibility and sometimes we desensitize the importance of data and access to data just calling it open banking. There is so much to it than that and we are seeing that here in Canada. The Canadian government has been very protective and is working feverishly to evolve regulations to protect people’s access to data. There are ongoing conversations about what that means and what role government should play. 

Interac is very focused on how to ensure we protect the data provided to us, either in transaction messages, as part of the customer relationship or as custodians of payment transactions in Canada.

The government is taking the right steps. They are seeking influence and input from industry, which is vitally important. It is important to understand that there is an ecosystem out there and that there are deep domain experts and institutions that live and breathe this every day. The government is being very prudent and wise in seeking industry council. Canada has a very pro-consumer regulator, which is great for protection and ensuring that things are done for the greater good of Canadians. 


How will the digital payments revolution help SMEs?

I am so passionate about the small and medium-sized enterprise (SME) market in this gig economy. One of the things I love about the Canadian DNA the most is that everyone is an entrepreneur or intrapreneur at heart. I have seen that work so well in emerging markets around the world.

“The digital payments industry should become more approachable and digestible for SMEs.“

What I would like to see is businesses becoming better informed. One of the things industry can do is take larger-scale investments, and level the playing field not just for the sake of it, but downsize large scale enterprise resource planning (ERP) systems and other things that benefit larger corporations. The digital payments industry should become more approachable and digestible for SMEs. That is key. 

The digitalization and transformation of the economy have driven SMEs into the world of digital payments. SMEs have started to understand it and digest that there are solutions in the market that larger corporations have had access to and that maybe they too can benefit from them. 

With the industrialization or commercialization of some of their processes and functions, SMEs are getting access to better data. They now have better infrastructure that is more easily digestible to banks and other institutions, regulators and authorities that can help them move forward their business in more creative ways. For example, there are trade receivable finances as well as ledgering at the till that can be used as a surrogate for income. Banks would then use that information to help these companies. I have used these types of mechanisms around the world to lend money to SMEs and even large corporations. 

We are seeing the benefits of larger innovations in technology coming downstream to SMEs. It is a very exciting evolution that is happening more so now because of COVID-19.

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What has been done and by who to move more government transactions online? 

I see tremendous advocates in government and I do see the national pride that Canadians have in using Interac e-Transfer, for example, for the distribution of Supplementary Employee Retirement Plan (SERP) payments and other government stimulus payments. The good thing about that is that it is more secure. Digitizing government services and payments means people do not have to travel and the money can get to people faster and safer. It also provides better data and there is better control and security. 

The Canadian government has been moving fast in embracing digital payments. I am really bullish on the adoption of these technologies and I have actually seen this adoption more in Canada than I have in many places throughout the world. There is this Canadian pride where people love Interac and view it as safe, sound, ubiquitous and for the greater good of the Canadian brand. It has become easier for me in my current role to help facilitate those types of payments from government.

“Industry is embracing technology to try and make a better life experience for Canadians.”

With vaccination passports and the better credentialing of government identifications (IDs) such as Ontario Health Insurance Plan (OHIP) cards, health cards and other different types of credentials that people have, there is a big focus on creating open access wallets controlled by the citizen that provide one centralized approach to credentials management. These wallets will be able to supply those credentials to different kinds of authentication points where people have to identify themselves or provide credentials. The industry is looking at applications for this and certainly, industry is embracing technology to try and make a better life experience for Canadians. Safety and security are also a priority.


Who or what would you pitch to get Canada moving in the right direction on digital payments and open banking? 

It starts with the consumers. Consumers and citizens have a voice. Canadians are very effective at using their voices to be heard and the government here is receptive to hearing them. Government is also taking the right steps to move this along.

I see a very pragmatic, measured and intelligent approach to current changes and potential changes in the future. I see this in the relationships that we have with senators, members of Parliament (MPs) and various forms of regulators in government. 

We are really coming together as Canadians, including regulators and industry, to provide solutions. The adoption of those solutions is going to take time but we just have to keep doing more of the same. We have to focus on connecting the heart with the head and the hand and good things will continue to happen.

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William Keliehor
Chief Commercial Officer - Interac

Bio: William Keliehor is the Chief Commercial Officer at Interac where he is responsible for driving the company’s commercial strategy. His past experiences with major financial institutions include serving in a variety of leadership roles at American Express, Citibank and MasterCard. His work in the industry has taken him all over the world, especially to Europe, the Middle East and Africa. 

Organization Profile: Interac is a Canadian interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac serves as the Canadian debit card system and the predominant funds transfer network via its e-Transfer service. The network was initially launched in 1984 as a cooperative venture between some of the largest financial institutions in Canada.