When I was first approached about leading Interac, I wasn’t sure. Canada just wasn’t on my radar. But as I met people at Interac and learned more about the work they were doing, I became convinced of the company’s potential — and the pivotal role it can continue to play in powering the Canadian economy.
So a little over a year ago, I took the job, just in time for an era of immense opportunity. We’re on the eve of a rebirth for the financial system. The Canadian economy is poised to leap forward and become a world leader in creating digital prosperity — and Interac will play a pivotal role in that transformation.
We have a new three-year strategy for 2025 to 2027, with this promise as our guiding North Star: Interac will lead Canadians to digital prosperity.
I’m happy to explain how we’ll leverage our unique attributes to do it, once again playing our customary role as a builder of secure, resilient infrastructure that drives the Canadian economy forward.
Account-to-account payments a ‘digital everything’ world
The background to this strategy is that we’re facing a number of shifts that are going to transform the financial lives of Canadians over the next three to five years. (And given Canada’s productivity challenges, these shifts couldn’t come at a better time.)
At Interac, our history of being a common good that enables sector-wide innovation – along with the trust we’ve built over decades with Canadians, government, and the private sector – gives us a unique vantage point.
Now, as Canada’s financial system makes its next big upgrade, we’re setting up to play a central new role. Actually, three roles.
Interac as an Operator
Operating the account-to-account backbone that will drive Canada’s economic prosperity.
For a number of years now, Payments Canada has been developing the Real-time Rail (RTR), which will extend instant account-to-account payments across the economy. A key part of the RTR is real-time exchange and messaging, which Payments Canada has trusted Interac to build, using the same technology that underlies Interac e-Transfer. Interac will help deliver Canada’s real-time account-to-account payment infrastructure, on which any number of financial providers can build new products and services using real-time payments.
Call it “instant payments.” Call it “account-to-account” or “account-based” payments. They all mean the same thing: People paying instantly, using the money that’s in their banking accounts.
Embedding real-time account-to-account payments across the economy will lead to faster, easier, and more convenient everyday transactions, like bill payments. It’ll also give merchants faster access to proceeds — a boon for small businesses, which Interac has always been proud to support. When they can pay and get paid instantly, cash flow improves, operations become more efficient, and customer interactions become more seamless.
We know from the experiences in other countries — including Brazil, India and Australia — what kinds of positive, economy-wide impacts real-time payments can have. For instance, Brazil’s instant payment platform, Pix, launched in 2020. Tens of millions of Brazilians had no prior experience with digital payments, yet by 2023 roughly 145 million consumers (86 per cent of the adult population) made more than 36 billion Pix transactions.
Adoption starts with consumers discovering that little things are more convenient. Perhaps they can pay at a food truck by just snapping a QR code. Or they discover that they no longer get hit with a late fee if they pay a bill the day it’s due. Usage snowballs, and before you know it, the very notion of doing business accelerates.
If you have any doubt about whether businesses are hungry for new use cases for digital payments, look at the growth of Request to Pay, a feature of Interac e-Transfer for Business. It grew 280 per cent over the year prior.
As the use cases and numbers of people and businesses using instant payments grows in the Canadian economy, they will drive greater velocity of money movement and greater job creation. The result will be higher, more consistent, more resilient growth.
Interac as a Protector
Defending Canada against digital fraud. Protecting transactions through digital verification.
Building a world of instant money movement creates points of vulnerability. Bad actors have started to harness artificial intelligence, and fraud is getting harder to spot by the day. Fraud is the greatest threat to a digitized economy — and in Canada the trendlines are already worrisome.
https://www.rcmp-grc.gc.ca/en/news/2024/fraud-prevention-month-2024-fighting-fraud-the-digital-era
This is where our second role in our upgraded financial system comes in. Interac is going to be a leader on fraud prevention and detection in the Canadian financial system.
There are two dimensions to protecting against fraud: prevention and detection. Let’s look at them in turn.
Prevention
Prevention starts with a deceptively simple question: How can you be sure that the person or entity you’re transacting with is who you think they are? In a world of instant transactions, that’s a high-stakes question. That’s why every transaction will need to start with some sort of authentication on both sides.
Properly managed, digital verification schemes — like BankID, which they have in the Nordic countries — make it much harder for financial crime syndicates to get up to no good.
At Interac, we’ve been investing in verification since 2019. We launched Interac Verified last year to help deliver a more consistent experience for consumers and organizations that need to make sure they’re transacting with the entity they think they are. We’re already using verification for partners like the Government of Canada for many government services, with millions of Canadians already using the service.
Detection
Thanks to our central role in the ecosystem, Interac is uniquely positioned to take a leading role in digital fraud detection for the benefit of all Canadians.
Our position in the middle of day-to-day transactions gives us the ability to identify patterns and take steps to help prevent likely fraud. We’re able to provide a consortium view of payments across the economy — across financial institutions and fintechs large and small, acquirers and merchants.
We’re a trusted partner to financial institutions, and have trusted commercial relationships with the government. We have well-established practices and capabilities to handle sensitive data.
All of which is to say: Data sharing through appropriate consent frameworks is an important action in securing transactions. We’re also looking into harnessing advanced technologies like AI to augment better and faster models in our anti-fraud fraud strategy. An example is the confidence that users gain from Confirmation of Payee for Interac e-Transfer, which tells you that you’re sending money to the person you intended it for.
In our role as a trusted intermediary partner, we’re going to ensure there will be robust fraud protections in place on Day One of the RTR. This is big news: Canada will be the first country in the world to introduce on Day One proper fraud protection as part of its national real-time payment infrastructure. That’s another role we’re playing in building digital prosperity.
Interac as an Enabler
Enabling simple, convenient transactions — empowering Canadian organizations to innovate and grow.
In our third role, we’re going to continue and expand our function of connecting consumers, businesses and financial institutions with seamless, secure payments and information exchange experiences. This is one of our strengths: making payments simple and consistent, in ways that every Canadian takes advantage of when they tap to make a purchase, or use Interac e-Transfer.
As the ecosystem evolves, the user experience will need to evolve, too. We’ll continue to invest and grow the Interac Debit, Interac e-Transfer and Interac Verified business lines to ensure that the user experience keeps up, is safe, and is consistent across the economy. At the same time, we will continue to innovate and look for new capabilities.
One area of focus is a digital checkout experience in the e-commerce environment. Wouldn’t it be great if we could have a made-in-Canada digital checkout experience that is specifically tailored to meet Canadians’ needs, with seamless integration with their existing online banking?
We will continue to broaden access to our services, empowering Canadian businesses, including fintechs, to scale and grow. Our position within the payment ecosystem enables us to facilitate the rollout of innovative solutions at scale by collaborating and connecting with partners, platforms and people.
An opportunity to lead the world
Canada has all the building blocks of a thriving digital economy. We have the real-time capabilities behind Interac e-Transfer, we have the fundamentals of verification, we have trust, stability, and expertise.
So here’s my call to action for the Canadian economy. First, let’s change our mindset and embrace the spirit of innovation — including the will to innovate faster.
Let’s collaborate more fluidly, across FIs, fintechs, government and the technology sector.
And let’s share data safely and securely to protect our infrastructure and Canadians’ day-to-day transactions — there’s no other way to advance our competitiveness as a nation.
The good news? From what I’ve seen, Canada can do all of that. We have the shared vision and the relationships in place. If we work together, we can advance our financial system to safely drive prosperity with solutions made by Canadians and for Canadians.
We can do this. We can create a digital economy that leads the world.
Below, you can watch my recent talk covering these thoughts at the Canadian Club in Toronto.
What’s the state of progress in developing faster payments for Canada?
