This IDC Perspective identifies the initiatives that are underway today to generate next-generation payment in Canada. The major focus today is providing new Payments Canada systems that can deliver near-real-time payment capabilities. One gap that exists is the lack of visibility on how the large banks and payment systems contenders will interface with the new Payments Canada systems.
The Canadian government has initiated a payment system modernization initiative that after eight years of study is finally moving into the implementation phase. The intent is to enhance financial services competition, substantially reduce the cost of handling payments by Canadian businesses, and keep Canada in sync with enhancements of payment systems globally.
Key components include the acceleration of payment transactions, the access to payment systems by nonfinancial entities, and the use of ISO 20022 payment data standards to reduce payment handling overhead.
Payments Canada and the Canadian financial industry are working on Canada-centric payment solutions with little attention being given to how components of advanced payments solutions from global payment leaders could be incorporated. In particular, all participants in the Canadian payments industry need to be wary of potential competition from the advanced China-based payments solution providers and the high-tech contenders.
"The implementation of next-generation payment systems globally has the potential to facilitate the entry of leading global payment leaders into the Canadian payments environment and totally disrupt the business plans of existing players," says Robert Smythe, research associate, IDC Financial Insights.
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