The new normal in Canada is an economy and society increasingly connected online. Canadians moved at rapid speed during the pandemic to adopt new technologies and digital services – and that continues to keep pace. Along with this digital adoption, the federal government is in the process of updating many of its laws and regulations to allow Canadians to thrive in a digital world.
With the introduction of legislation such as Bill C-27, ongoing consultation on an open banking system and regulatory updates to Canada’s payment framework, we are seeing necessary progress in Canada’s digital competitiveness that should help enable new innovative solutions and services for Canadians.
To assist on identifying needs for a path forward, Interac provided recommendations to the House of Commons Standing Committee on Finance’s annual Pre-Budget Consultation process. We believe government should continue to enhance service delivery and support increased convenience for all Canadians through the adoption and expanded use of digital payment processing and digital verification solutions across the federal government.
Below is a summary of our key recommendations. You can read our full submission to the Committee here.
Modernization of government payment processing
Providing new digital payment processing capabilities to businesses and governments to complement existing methods is a priority for Interac because of the benefits that can be realized, including increased efficiency, ease of use and cost savings.
Launched in 2021, Interac e-Transfer® for Business builds on the widespread adoption of the retail Interac e-Transfer service by providing features and benefits that Canadian businesses need in an increasingly digital commercial environment.
During the pandemic, Interac worked with several provincial governments to distribute aid securely and quickly using Interac e-Transfer. There is room for further adoption of such solutions across the federal government, in line with the goals of digital adoption and modernization set out in the recent Digital Ambition 2022 document released by the Treasury Board Secretariat.
In its submission, Interac encourages the government to take a citizen-centered approach to payment service delivery, prioritizing digital adoption to reduce the reliance on cheques and make government payments more efficient and cost-effective.
Advancing access through secure digital verification services
Building economic prosperity requires an approach to digital access and verification that places Canadians, and their privacy, squarely at its centre.
Through digital verification solutions, Interac already helps empower Canadians to take advantage of seamless and secure digital services. Like with Interac payment processing solutions, these are supported by trusted authentication that allows individuals to maintain control over their personal information, including who can access it, and when.
Interac Verified builds on our track record of collaboration, which includes nearly 300 financial institutions connected to our payment network, and over 280 government services relying on our authentication and digital sign-in tools.
With commitments in Minister Mona Fortier’s mandate letter, and with the release of the Digital Ambition 2022 document from Treasury Board Secretariat, the government has signaled consultations will soon occur that will help enable public and private sector innovation in digital authentication.
Interac encourages the government to launch consultations focused on enhanced digital verification capabilities to allow Canadians to access a range of government services digitally with security and simplicity.
Implementing an open banking framework
From identifying the potential of open banking to defining next steps via its Advisory Committee and appointing the Open Banking Lead, the government has laid the foundation for a made-in-Canada framework that will benefit Canadian businesses and consumers.
The conversation is now focused squarely on success factors that are crucial for a sustainable, long-term open banking solution. Interac is pleased to be part of industry working groups to provide insights around topics such as privacy, consent and user experience.
As we move forward, the challenge remains striking the right balance where protection is maintained by developing the right common rules and frameworks around privacy, security, accreditation, and liability.
Interac encourages the government to meet its target deadline for a balanced, scalable open banking system with legislative changes brought forward on an appropriate timeline.
Payments policy and legislation
The federal government developed the Retail Payment Oversight Framework and passed the Retail Payment Activities Act as part of Budget 2021. Together, these provide a blueprint for innovation and competition while maintaining a secure payment environment. This balance between innovation and security is a central reason behind Canada’s position as a leading example to other countries around the world.
Interac recognizes the key role of government to enable access to national payment infrastructure for fintechs and payment providers. By doing so, government can foster an environment that encourages innovative new service offerings while maintaining standards and consistency for those seeking to enter the market.
Interac encourages the government to proceed with updates to the regulatory frameworks and access rules around payments to keep pace with new capabilities and market needs while balancing any risks inherent in these changes.
Organizations across Canada are signing up to take advantage of our digital verification solution, Interac Verified.