Federal and provincial pre-budget submissions by Interac highlight need to accelerate digital solutions in payments, government services and consumer and business transactions for Canadians.
The COVID-19 pandemic has accelerated trends toward digitization in the wake of broad public health measures, continued business disruptions and extended work from home. Canadians have been incorporating or accelerating their shift to digital solutions – in payments, government services and business transactions.
The demand from consumers and businesses has increased expectations for faster, more convenient and secure digital services, something which governments at all levels have acknowledged and in many cases are working to address via digital government modernization programs. Interac sees a significant opportunity for government to accelerate these plans and bring forward new solutions for the benefit of residents and businesses from coast to coast. To make these objectives clear, we recently provided recommendations to the federal pre-budget consultation process, including separate submissions to the Ontario and Quebec Government (French Only).
Setting a clear path for Open Banking
Last year, Minister of Finance Chrystia Freeland released the Advisory Committee’s Final Report on Open Banking, which included a recommendation that open banking be implemented by January 2023. The report acknowledges the benefits of a secure open banking system for Canadians, enabling them to do more with, and have greater control over, their financial information. Since then, direction to introduce an open banking system was included in the mandate letter of Associate Minister of Finance Randy Boissonnault, and we are optimistic that this express focus will help to move this initiative forward.
To address consumer needs to access personal financial data securely and help create opportunity for businesses, the Department of Finance has a detailed path set out by the Advisory Committee report.
As the government moves forward towards implementing an open banking system, Interac is eager to see an open banking lead be appointed to help steer the execution of all phases of the implementation plan as set out in the Advisory Committee’s report. To create a truly made-in-Canada solution that is inclusive, flexible, and extensible, government-industry conversations should lead to a joint action plan where each side has a clear role to play, bringing to bear their respective value.
Developing Digital ID for Canadians
Canadians are increasingly relying on technology to exchange not only money, but also their identifying information. Interac was pleased to see the federal government include a commitment to digital identity in its recent mandate letter to Treasury Board President Mona Fortier. We agree that developing common and secure approaches for trusted digital identity platforms will be critical to supporting seamless service delivery to Canadians.
For digital identity to fully provide its benefit to society, it needs to be underpinned by foundational government credentials, such as birth certificates, citizenship documents or permanent residency status. These documents are the means by which we obtain other trusted identities, such as bank cards and employment credentials.
At Interac, we believe digital identity can serve as a bedrock for an inclusive digital economy. Having recently completed a strategic transaction to acquire the exclusive rights to SecureKey Technologies’ digital ID services for Canada, and following our acquisition of 2Keys Corporation in 2019, Interac is working directly with governments and private sector organizations to help make secure digital ID a reality across Canada. In doing so, we are aiming to leverage our deep experience with governance structures based on running a national payment network, as well as our trusted brand with Canadians.
Interac thus encourages governments across Canada to move forward with technical and policy changes required to enable Canadians’ use of digital identity if they so choose, relying on foundational government credentials.
Modernizing business and government payments
One of the ways in which governments can adapt to better serve the public is by increasing its adoption and usage of digital payment solutions. New payment capabilities offer the ability for people and businesses to conveniently pay and receive money from government, all while ensuring security and protection of personal information is upheld.
Interac recently launched Interac e-Transfer for Business, an innovative solution that builds on the widespread adoption of the Interac e-Transfer service. Interac e-Transfer for Business can streamline paper-based accounting processes to help businesses maximize working capital and reduce operational inefficiencies. Key features include the ability to send funds instantly with real-time confirmation, higher transaction limits and account numbers that can be used to route payments.
For governments across the country, COVID-19 has emphasized and reinforced the need to be able to move money to individuals and businesses quickly and securely. Interac e-Transfer Bulk processing services offer a secure way to make thousands of payments through a single file upload, without the need for the recipient’s banking information. Governments can use this service to distribute things like emergency aid relief quickly and securely to those who need funds fast, as well as to request and collect payments from residents. In Ontario, we were pleased to see the government incorporate this service in its distribution of funds through both the Support for Learners and Support for Families programs, and would encourage further exploration of programs where similar disbursements make sense.
Interac sees an important opportunity for government to modernize government-to-citizen and citizen-to-government payments through digital, real-time payment and disbursement options used by businesses and citizens alike.
Making public transit accessible and inclusive
Despite reduced ridership due to the pandemic, transit services remain vital to our communities. As we look ahead to the future, ensuring efficient and equitable access to transit will continue to be important.
The use of contactless debit for transit open payments provides a low-barrier, equitable, and convenient payment option for everyone with a debit card (approx. 97% of Canadian adults). It gives transit riders convenient access without needing to purchase separate tickets or passes, or having to pre-load a dedicated fare card. For pre-pandemic transit riders able to work from home or drive to work, an enhanced customer experience through transit open payments may also encourage a speedier return to transit.
Recently Toronto’s UP Express, the rail link that connects Union Station with Pearson International Airport, expanded contactless payment options with the implementation of Interac Debit for customers. We would like to see continued momentum for future integration on further transit systems across Canada.
Interac sees both the Ontario and Quebec Government playing a key role by lending support to transit authorities to enable the use of contactless debit for open payments on transit systems to lower barriers, add convenience, and encourage a return to transit through enhanced customer experience.