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How instant payments are changing the game

Yesterdays’ payment systems are unable to keep up with how quickly Canadian businesses are innovating. Learn about the benefits an instant payments system can offer your business.

By ATB Financial 12 May 2023 4 min read

Alberta’s digital payments landscape is shifting rapidly. Large-scale efforts have created a  safe, modern, fast, innovative experience that emphasizes the importance of data.

Interviews with experts in payments modernization reveal the power of a cutting-edge payments system and how financial institutions like ATB can guide business leaders to make the right payment decisions.


Challenges with legacy payment systems


Last-gen payment processing methods are costing Canadian businesses. According to some reports, cheques, paper invoices, cash, electronic funds transfer and more cost Canadian businesses up to $6.5 billion per year.

Convoluted processes

With yesterday’s corporate payment methods, businesses get payment (also called “remittance”) details separately from the payment in print and digitally. They have to manually match the remittance information to the payment they received. This convoluted process means high processing costs, as large teams are needed to tackle this task.

Need to make a guaranteed, time-sensitive payment? Businesses used to have to send a high-cost wire transfer. Not only are these expansive, they also need more banking information and additional screening. Further, wire transfers lack transparency—the sender won’t receive confirmation when the recipient gets the funds.

Outdated methods

According to Payments Canada, cheques are used for 40 per cent of the value of all commercial transactions in Canada. Even though cheques continue to be widely accepted, increasing scrutiny, fraud and processing costs are driving the need for digital alternatives. This is why their popularity is waning.

“Legacy systems can’t do what consumers and businesses expect the [internet] to do with payments,” says Christine Dougan, managing director of payments at ATB. “Payment modernization is about taking this 1970s approach and bringing it up to speed so it can easily operate in our 24/7 cloud-based, always-on world.”

“The modernization of payments in Canada involves changing the fundamental systems that underpin today’s payments. They need to be built on modern technology that supports fast, easy payments, future innovation and an ever-increasing quantity of data.” says Brian Hans, director of modernization at ATB.


Next-gen payments methods are here now.

More advanced ways of paying are available right now for Alberta businesses. Take Interac e-Transfer® for Business, which can send and receive payments instantly. It also offers rich remittance data using the ISO20022 standard (the internationally recognized standard ​​​​designed to simplify global business communication) and higher limits.

Another example is Lynx, the new high-value payment system that supports wire payments. This new system incorporates a new risk model and architecture that prepares for the data-enrichment of wires that’s expected in late 2022.

Payments Canada has also launched Real Time Rail, a brand new payment system that provides Canadian consumers and businesses with data-enriched, 24/7/365 real-time payments.


Benefit now from payment modernization

Streamlined payment services radically simplify payment processes. With information in each transaction, such as invoice and purchase order numbers, processing can be automated through an integrated accounting system.

“Sophisticated business users want to professionally manage their cash flow and digital payments offer the predictability that they need,” says Dougan.

What Dougan and Hans both recommend to businesses is to strategically embrace the shift to digital payment technology by understanding payment modernization and shedding the legacy systems they’re accustomed to.

“We’ve seen how there can be a learning curve to adopting digital payments, but we work with businesses to help them recognize how their operations will be made easier with innovation in this area,” notes Hans.

“One of the key aspects in preparing will be understanding how various vendors, service providers and strategic partners may be planning to leverage the new payments and the data that comes with them.”

Dougan adds that several business sectors can reap the benefits of payment modernization. 

“We’ve received a lot of feedback on how energy and agriculture need to manage cash flow tightly and can see efficiencies with data-rich and real-time payments,” she says. “In insurance payments they need to extend emergency payments immediately, which digital payments can help make happen. And in contractor-heavy companies, confirmations of payments received can be very important.”


The pros and considerations

Of course, any change comes with trade-offs. For an in-depth look at the pros and considerations of embracing cutting-edge payments, read more on the power of real-time payments.


We’re here to help

Next-generation payments are now a major game-changer for Alberta businesses looking to scale their business operations with smoother transactions and a more transparent payments system. Yesterday’s legacy models can’t keep up with the speed of growing businesses. A digital-first approach will empower companies to operate with confidence and optimism.

Alberta businesses can be confident they can confront the challenges of payment modernization by talking to an ATB specialist, Dougan says. “We’re deeply involved with other industry leaders in planning the future of payments in Canada. ATB is at the table with policy makers and businesses such as Interac and MasterCard and VISA. Our team is in the weeds to offer our expertise to businesses looking for guidance in payment modernization in Canada.”

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