Think back to 2007: If you were like most people, you probably paid for most of your day-to-day purchases with cash, you didn’t have a smartphone and you may have only rarely (or never) bought anything online.
The world and the Canadian economy were in a very different place when Mark O’Connell stepped into the role of President & CEO at Interac Corp. (Interac). Now, as he prepares to retire and Jeremy Wilmot has joined as new President & CEO, Interac is helping more and more Canadian consumers and businesses navigate their increasingly digital day-to-day interactions.
Interac In the Know spoke with Mark about the highlights of his eventful time as President & CEO and what he foresees for the future of payments, digital verification and tech innovation in the Canadian economy. Here’s what he shared.
Interac In the Know: What are some of the biggest changes you have seen during your tenure at Interac?
Mark O’Connell: As I was reflecting and preparing to pass the torch, it was mind boggling to think back on the changes in payments and the broader economy. When I came in, smartphones were not widely used, and now we are using our phones to pay for things without even thinking about it.
From my vantage point, I’ve witnessed the significant decline in the use of cash and a parallel rise in the use of other payment methods, notably debit. A fact many may be surprised to learn is that the Interac platform enabled Canadians to be the number one per capita users of debit in the world, and I’m proud to say that we have been in the top three for the past 10 years.
This has been driven by an increasing number of Canadians preferring to use contactless capabilities, which we rolled out in 2010 via card and in 2017 via integration with mobile wallets. Nowadays well over half of debit usage is through tapping a phone or a card.
And then there is Interac e-Transfer. When I walked in the door 17 years ago, Canadians were dabbling with it to the tune of six million transactions a year. Today we are north of one billion.
All these developments have impacted the Canadian economy and society in significant ways, upending traditional value chains and establishing new consumer expectations and behaviours.
What are some of the challenges you have witnessed and how has Interac navigated them?
I like to think that, during periods of change and uncertainty, Interac has been at the side of Canadian consumers and businesses, connecting them securely with their money and data.
You can see the importance of the role Interac plays in the growth of our services and their resilience during tough economic times. Take the pandemic for example. While much of the economy was shut down, we witnessed historic growth in the usage of the Interac e-Transfer service as Canadians sent money for shared grocery trips or transferred funds to family and friends. Governments across Canada have also adopted Interac e-Transfer to distribute grant or emergency aid payments quickly and securely.
Another area is security, and ensuring Canadians are protected when transacting. A year after I arrived we launched Interac Debit Chip and PIN — moving Canada’s 35 million debit cards to chips from magnetic-stripe technology in one seamless effort. This change effectively eradicated payment fraud at the point of sale and is a major reason why the Interac network has some of the lowest fraud rates anywhere in the world.
What are you especially proud of, in terms of what Interac has accomplished?
Canada’s history as a leader in global payment innovation is something we should all be proud of. As a made-in-Canada technology company, Interac has been a key part of this. Personal cheques are now largely obsolete in the retail space. Contrast this with the U.S., where you may still see people paying for groceries via personal cheque. We also helped pioneer email money transfer in Canada, and as I mentioned earlier, we have seen exponential adoption of this via the Interac e-Transfer service.
All of this is made possible via the scale of the Interac network and our platform. By working in collaboration across the financial services ecosystem, we have created a network that is both widely available, accessible and affordable for Canadian businesses and consumers, while also creating the conditions needed for continued innovation and growth. By providing Canadians with the ability to use their own money, we have reinforced the role for a strong domestic debit network built for Canadians by Canadians.
Beyond that, however, I’ve always thought delivering technology wasn’t enough. After all, the economy is made up of people and communities. So we’ve also invested in initiatives that allow more Canadians to actively and confidently participate in the digital economy — like our partnership with Conscious Economics, for example, which works to increase financial literacy and economic empowerment among consumers and entrepreneurs and our support for Canadian small businesses via the Canadian Federation of Independent Business.
What insights can you share about the future direction of innovation and the economy?
I’m optimistic about Canada’s potential, especially the opportunities we have to leverage the shared platforms and networks we have built for scale and adoption in new ways.
Take Canadian businesses, especially small and medium-sized businesses (SMBs), for example. With the rollout of our Interac e-Transfer for Business service, we are aiming to displace business cheques similar to how Interac e-Transfer has drastically decreased the usage of personal cheques. We continue to build on the capabilities of Interac Debit; one solution for the faster digital world that SMBs are facing is Software-Based Pin on Cots (SPoC) for Mobile Point-of-Sale transactions, which enables a business as small as a one-person show at a farmers’ market to take payments on a mobile device.
Another area of significant opportunity is digital verification, which Interac has invested in heavily in recent years. We want to do what we did for the payments industry, in terms of a low-cost platform exchanging payment information, for verification and authentication online.
For example, if you are a business and you want to verify the authenticity of a customer to enable them to complete a high value transaction, you need to be sure you are dealing with an authentic person. This is exactly what our recently launched Interac Verified product suite is designed to do. We already support millions of authentication and verification transactions annually and expect this to grow and evolve into new, untapped applications across business and government in the years to come.
And as that happens, your successor will be there to steer Interac into the future. What can you tell us about Jeremy Wilmot?
The Interac Board of Directors made a great choice for the next CEO to continue our important work. Jeremy is a seasoned leader who has worked at the forefront of global payments innovation and tech innovation in general.
His experience with real-time payment systems will be particularly valuable. One clear demonstration of the need for more real-time payments innovation in Canada is the growth of Interac e-Transfer. For both consumers and businesses, real time is now an expectation, and this underscores the importance of work already underway to modernize our national payments infrastructure. Jeremy’s leadership, along with the infrastructure and network Interac has built, are critical as we prepare for the rollout of the Real-Time Rail, led by Payments Canada.
Jeremy has also inherited the most innovative team in Canadian payments and verification. The heart of Interac is this immensely talented group of people, which has grown seven times since I started. We’ve been determined to recruit from among the country’s top fintech talent to keep expanding on what we deliver to the Canadian payments and verification ecosystems. And a big part of how we’ve done that is by being a supportive employer — one of Greater Toronto’s Top Employers, actually, which I’m personally very proud of.
This is a team that’s going to make sure Interac keeps working to put Canadians in charge of their money and data, building and innovating on critical payment and verification solutions with security at the forefront and supporting economic growth by enabling consumers and businesses to transact seamlessly whenever and wherever they are.
How has Interac evolved over the last few decades?