Canada: Trust in a Digital Age - The 2017 Canadian Payments Innovation Forum
The subject of trust and its effect on payment innovation took centre stage at the Canadian Payments Innovation Forum. Hosted by RFi Group on November 16th, 2017, in Toronto, more than 150 people came together to discuss the possibilities of a cashless society, Blockchain and open data (APIs). Regulations, biometrics and the nature of cities were also featured topics.
Paul Parisi, President of PayPal Canada, kicked off the day with a talk about the customer experience and “contextual commerce.” This type of commerce uses “buy buttons” on social media pages and the integration of purchase options via “the Internet of Things” (IOT). Paul also addressed the demand for convenience and how it is changing the whole idea of buying: soon our refrigerators will be ordering our eggs for us and apps will be paying for our gas while we are in our cars.
Charles Green, Co-founder & CEO for RFi Group, emphasized that “in-app purchases are the future of contextual commerce and drive convenience innovation.” Companies who don’t seek transformation will fall behind China and other markets. Platform and in-app experiences such as WeChat Pay and Alipay, for example, already process billions of transactions per year and they’re now here in Canada thanks to companies like Motion Pay.
Stacey Madge, Country Manager & President of Visa Canada talked about the benefits of the Green P Parking app so we don’t have to stand in the winter slush and dig out our coins. Most of us are still taking out wallets and digging through our purses to pay, but mobile payment options are on the rise.
Although many are moving to digital payment solutions, the panel on the “cannibalization of cash” acknowledged that cash is not going away anytime soon. “Interac did 90 billion in transfers this year,” according to Debbie Gamble, VP of Digital Products and Platforms for Interac. So we know that Canadians share funds electronically. In fact, they’re a bit ahead of merchants in this respect. Many Canadian businesses still take only cash – feeding a world of tax evasion and efforts to avoid paying credit card fees. According to Visa Canada, 83% of Canadian small to medium-size businesses cannot take payments online!
Collaborative Cities and Digitization
Brian Lang, President of Mastercard Canada is an advocate for smarter countries, cities and data‑driven decisions. Brian said, “we have to connect the dots to make things holistic, scalable, and secure by design. Malls are like a small city, so MasterCard has been working with them to create a seamless payment landscape.”
Ideally, different levels of government, financial institutions and retailers will get more involved to drive change. Introducing some kind of unified protocol, such as Sweden’s bank ID, will most likely be required to promote digital transformation across the board.
Open APIs, Open Data
Regulation, trust, privacy comes down to data. Who owns the data? Who will share it? New standards, such as PSD2 and the demand for convenience are already changing how we live, day-to-day. “Ultimately, open APIs and open data allows technology to get out of the way,” says Brian Deck, CEO of Smooth Commerce. “Life is better because of Uber, for example, and people will have more choice and flexibility as to how they share data with platforms and services.”
The case for Blockchain was promoted by Iliana Oris Valiente, Managing Director, Global Blockchain Innovation at Accenture, but a Blockchain world will remain still a distant prospect until the technology moves from the developers into the mainstream. Many of the attendees at this year’s Innovation Forum also work closely with regulators on a daily basis, and they too suggested that Blockchain technology has a long road ahead before widespread implementation.
Cathy Vigrass, Head of Canada for Square, spoke about streamlining the merchant onboarding experience and how Square became the payment processor of choice for micro-merchants and small businesses – breaking into cash-only operations and making it easy for businesses to “do business.”
“Merchants prioritize selling, growing their business and getting more customers,” says D’Arcy Delamere, President of TD Merchant Solutions Canada. “This is in direct competition with new types of payments.” Ultimately Canadian merchants are missing out on a huge financial opportunity, because Canadians will spend 42 billion online in 2018, according to PayPal Canada.
Digital Identity and Biometrics
Closing the day with a panel on digital identity, Katie Greenberg, Director of Digital Commerce at Scotiabank, reminded us that “Google knows more about me than my bank, and people really need to update their values around trust.” People have online habits that contradict their actions when it comes to security and technology – especially in Canada with slow mobile wallet adoption vs traditional plastic. Will regulation and merchant adoption be the answer? We’ll see.
“The Internet is anonymous, so it can be challenging when you want to digitize and you don’t want to create multiple databases for authentication,” says Franklin Garrigues, VP of Digital Channels at TD Bank. But Katie added, “biometrics are definitely coming into play through touch ID, face ID, voice recognition, app and device behaviour, and the scanning of fingerprints and veins. "
At this year’s Innovation Forum, it would seem that change comes down to trust, and while more and more tech and platform companies are reaching out to merchants and customers to join the innovation transformation, it’s going to take some time. That being said, the message is clear: innovation is happening, and those who don’t embrace it sooner or later, stand a good chance of getting left behind.
Susan Varty, the Managing Partner at HeadStart Copywriting, writes about payment trends, products and technology in Financial Services.