Some readers may not be particularly familiar with Interac, which manages a major interbank network in Canada, and during 2018 converted over to a for-profit corporation. The company products are synonymous with debit and ATM in Canada. In this release through PaymentsSource, the piece discusses e-Transfer, which is a P2P money transfer system that operates 24×7, sends funds in near-real time and requires the receiver to ’deposit’ the funds when they are notified. The app used to be called Email Money Transfer and has been operable for more than 10 years already. The e-Transfer volumes reportedly exceeded those of Zelle in 2018. The point of the release is that Interac expects to add an overlay of services for expanding the usage to the SMB sector (some businesses already utilize the service anyway).
‘In the next year, Interac plans to put new capabilities on top of its P2P app, to broaden usage among the app’s base. Of particular interest is how small to medium-sized businesses can use P2P capabilities, either for their own transactions or to engage with consumers.’
This is sort of a logical progression, and in fact has already been executed in Singapore, where PayNow Corporate was launched in 2018. In the U.S. we have already seen Venmo moving into B2B and expectations are that Zelle will formally extend into SMB payments fairly soon.
“It comes down to the fact that business want to transact here,” Kar said. “It’s the utility they need. The blend is the same. It’s someone asking to pay or someone shipping funds to another party.” Even as P2P apps grow quickly, they still serve a narrow range of use cases. Diversifying transaction types and reaching to business users is likely necessary to keep the apps from becoming “dumb pipes.”
The plethora of new payments apps and services creates choice and convenience, but most of all, continues to provide digital alternatives to the continued massive SMB use of paper processes and payments. As we continue moving into Industry 4.0, these types of services will become the default norm.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group