In recent years, the pace of digital adoption has accelerated across a variety of sectors in Canada. For many Canadian consumers and businesses, being able to access and interact with a broad range of online services is now the expectation. The cumulative effect of these trends has propelled us into an era where digital government, online verification, and financial system evolution have emerged as pivotal focal points in our national discourse.
To assist on identifying needs for a path forward, Interac recently provided recommendations to the House of Commons Standing Committee on Finance’s annual Pre-Budget Consultation process.
Our submission to the Committee reflects the imperative to enhance online service delivery and support increased convenience for all Canadians through the adoption and expanded use of digital payments and verification solutions across the federal government. It also encourages government to continue to modernize government services, ensuring that they are accessible and user-friendly, while remaining laser focused on security and privacy.
Below is a summary of our key recommendations. You can read our full submission to the Committee here.
Increase access to secure, online services through verification
A recent Interac survey highlights the growing expectation among Canadian citizens to access government services online, with 69 percent of respondents expressing this preference. This trend aligns with the increased utilization of online services following the pandemic, with access to government services like the Canada Revenue Agency, as well as private sector applications like real estate and banking.
Interac recommends that the government enhance access to secure online government services, through the adoption of digital verification and authentication – aiming to simplify and increase accessibility for safe online interactions for Canadians.
A key benefit of digital verification is its potential to help combat fraud. By validating that each side in a transaction is legitimate, consumers, governments and businesses benefit from increased levels of assurance required to complete high value interactions online.
The Interac Verified suite of solutions is already in use in parts of the federal government and in some provincial jurisdictions, leveraging Canadian technology and the Interac network to authenticate and verify user data.
Provide Canadians with digital payment and disbursement options
Historically, Canadians have been eager adopters of new payment options, including debit, contactless and mobile payments. The person-to-person email money transfer area is no exception. Since its launch in Canada in the early 2000s, the Interac e-Transfer service has become ubiquitous in the lives of Canadians.
Interac has worked with provincial governments, particularly throughout the pandemic, to modernize benefit and emergency disbursement payments by leveraging the Interac e-Transfer service. In Ontario, the provincial government leveraged the Interac sign-in service as an option for citizens seeking to apply for the student Catch Up Payment program, and Interac e-Transfer as an option for citizens to receive payment.
The federal government has an opportunity to leverage similar solutions for use cases like benefit or grant disbursement, provision of emergency assistance and tax payment collection.
In its submission, Interac encourages the government to take a citizen-centred approach to payment service delivery, prioritizing digital adoption to reduce the reliance on cheques and make government payments more efficient and cost-effective.
Develop an open banking framework
While pursuing payments reform, Canada can draw upon global experiences to implement a successful open banking model that is uniquely tailored to our market. We know that a successful model will focus on consumer data control, informed consent and system security, and that’s why Interac welcomed the opportunity to participate in Finance Canada’s industry working group consultations on open banking.
The working group was created with the aim to develop a “made-in-Canada” regime by bringing together balanced representation and perspectives from across the ecosystem to advance open banking, but in a way that would maximize the benefits for all stakeholders – with consumer privacy and security at the forefront.
Interac looks to Finance Canada to bring forward an innovative framework for open banking that reflects global best practices and insights from the industry experts consulted through the working group.
Interac recognizes the importance of enabling broader access to payment infrastructure for fintechs and payment providers. Doing so will help to foster an environment that encourages innovative new service offerings while maintaining standards and consistency for those seeking to enter the market.
While progress has been made through measures like the Retail Payment Activities Act, Interac joins the call for further updates to the Canadian Payments Act, enabling registered payment service providers access to national payment infrastructure.