A Call for a Canadian Payments System Upgrade

by Mercator Advisory Group 0

The Canadian government has just released a report on how to move Canada deeper into electronic payments. The report covers a range of topics with special focus on mobile, electronic government payments, and identity services. While mobile payments are a significant topic, much of the potential efficiencies from an improved system revolve around electronic billing and the ability to deliver electronic invoices for fast payment to Canada’s nearly 35 million residents. And that is a problem that continues to vex Canada’s far larger neighbor to the south.

At the behest of Finance Minister Jim Flaherty, the task force spent 18 months examining opportunities and challenges involved in decisively moving Canada away from paper-based payments. It was led by Patricia Meredith, a Toronto-based financial and technical services industry consultant.

They’re calling for a “state of the art” mobile-payments system for consumers, noting that although Canadians are among the world’s heaviest users of online shopping, banking and web browsing, mobile payments are “largely absent in Canada.”

“We still rely largely on old-fashioned methods of payment such as paper-based processing and cash and cheques,” the review said. “In addition, Canada is falling behind in the international push to generate a secure mobile ecosystem, the revolutionary agent that will deliver extraordinary new commercial and public services to consumers via their smart phones.”

Meanwhile, 27 European Union countries, Brazil, Russia, India, and China, “and even Peru and Romania are significantly outpacing Canada’s transition to digital payments, with obvious negative implications for Canada’s global competitiveness and interoperability.”

The review attributes Canada’s failure to keep pace upon “stagnation” in payment systems by “Canada’s major banks and other key institutions.”

Click here to read more from the Financial Post.