With the 44th Parliament officially underway, the federal government continues to face a world changed by the COVID-19 pandemic and its varied effects and impacts on Canadians. Notably, the proliferation of new ways of working and doing business, and the acceleration of digital adoption across many facets of the Canadian economy, have arguably increased the need for government to advance solutions to help Canadians navigate this new normal.
Interac, through its payments and digital identity and authentication technology, is continuing to evolve its solutions to help keep Canadians safe and secure when transacting.
As the government makes a robust COVID-19 pandemic economic recovery a priority for this parliament, acting on digital transformation opportunities by advancing digital policies and payments modernization has the potential to help Canadians adapt to the evolving digital economy.
With this in mind, Interac will be keeping a close eye on the following areas in the months ahead:
Digital payments modernization
COVID-19 has altered the way many Canadians pay and exchange money, with more and more transactions shifting to digital and contactless over more traditional cash and cheques. Many businesses have also had to adapt and quickly shift their operations, by launching new e-commerce options or migrating from paper to electronic invoicing.
As the government looks to advance its own digital transformation, modernizing both government-to-citizen and citizen-to-government payment processes is likely to increase efficiency and can help meet Canadians where they already are. To this end, one step the government could consider is moving to adopt new digital and real-time payment and disbursement options used by businesses and consumers alike, such as Interac e-Transfer for Business.
Another development we will be watching for in this parliament is the continued advancement of retail payments policies. The passage of the Retail Payment Activities Act by the previous parliament has the potential to be a good first step, and we look forward to continued progress in this area by the Department of Finance and the Bank of Canada. Interac believes there is a balance to be maintained between fostering innovation and maintaining the robust security Canadian consumers and businesses expect from their financial services.
Establishing digital ID as a bedrock for an inclusive digital economy
The government has identified the principles of the protection of privacy and security as part of its Digital Charter. One way to potentially enhance the security and ability for Canadians to safely navigate a digital world is digital ID. Strides are being made on establishing common standards and platforms, both within Canada and in partnership with the international community, but there is more work to be done. Having recently completed a strategic transaction to acquire SecureKey’s digital ID services for Canada, and following our acquisition of 2Keys in 2019, Interac is working directly with public and private sector organizations to help make digital ID a reality in Canada. For digital ID to meet its full potential, we believe it needs to be underpinned by foundational government credentials such as birth certificates, citizenship documents and driver’s licences, and broadly accessible with both public and private sector use cases. We believe progress can be made during this parliament to work towards a future where all Canadians can access and benefit from digital ID.
Operationalizing an open banking system by early 2023
Interac was encouraged to see the government commit to advancing the timeline of early 2023 for the implementation and operationalization of an open banking system in Canada, as recommended by the Department of Finance’s Open Banking Advisory Committee. Open banking implementations in other jurisdictions have been shown to help improve access to financial services, ensure a more level playing field, improve competitiveness and foster innovation, and could have the potential to do the same here in Canada. Open banking may also hold special promise for Canadians hard-hit by the COVID-19 pandemic – those that were already financially vulnerable, women, and small- and medium-sized businesses.
Interac sees value in the secure open banking system described in the report of the Advisory Committee, which includes common rules for open banking industry participants, an accreditation framework and process to allow third party service providers to enter an open banking system, and technical specifications that allow for safe and efficient data transfer.1 Interac sees this as key to setting up an ecosystem that can help improve the financial futures of Canadian consumers and small- and medium-sized businesses. Combined with the modernization of Canada’s payments infrastructure with the Real-Time Rail and the launch of the Pan-Canadian Trust Framework for digital ID, the addition of a secure open banking system may represent a significant leap forward for consumer-driven financial services in Canada.
1 Final Report from Advisory Committee on Open Banking 2021, Department of Finance Canada