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The future of payments in Canada

By ATB Financial 3 August 2021 2 min read

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The move toward data rich real-time payments will give users access to both their financial and non-financial data in a faster, simpler and more secure way, says ATB Business Solutions Vice President, Brian Ford. He describes the ability to integrate and create straight-through processing, as a game changer. “Everyone benefits.”

COVID-19 has accelerated the need for digital payment solutions, pushing this to the top of the agenda for financial institutions in Canada and around the world. It has underlined the need for implementing ideas like real-time payments, open banking, digital currencies and digital identities. According to a recent report titled Payments Modernisation: The Cloud Imperative, “70% [of payment service providers] have seen digital adoption dramatically increase in the customer base.”

“The push to more digital data along with digital payment methods will not only allow customers more context in terms of moving money, it will also enhance insights from the data and will help with end-to-end processing,” says ATB Business Solutions Managing Director, Natasha Lalani.

Currently, more than 50% of business-to-business payments in Canada are made by cheque. The majority of payment types currently in use (Electronic Funds Transfer—EFT, wires and cheques) have limited data. But this is changing fast, as banks move away from paper-based solutions and data starts being incorporated with the payments.

ATB is taking a leadership role in payments modernization for Albertans, through ATB’s participation in a national cheque reduction program with Payments Canada.

The future of payments

The future of payments is all about improving digital banking products and services, and leveraging data (which will also help combat fraud) to deliver customized, personalized solutions to customers.

Real-Time Rail (RTR)—the platform that real-time payments will run on—is the first, foundational step toward the future of payments. Eventually, RTR will be combined with open banking, which will open up access to end users (businesses and individuals) to participate. This will benefit users, by allowing them to make payments in a modernized payments system, and authorize their bank to securely share their financial data with other organizations (such as financial technology firms).

What's coming in Canada - and around the world?

A major component of a modernized, real-time, data-enriched payment system is being delivered through Interac e-Transfer® for Business. This is a major step for Canadian payments, through the inclusion of remittance data within real-time, account number-based payments.

Looking to the future, payments will be instantaneous. The future of payments is about having options, the ability to move money easily and relatively inexpensively, both between banks and around the world. “Payments will be faster, simpler and more secure. You will have the ability to receive insights from your data and get alerts based on your transactions, this way your bank can work for you and you can focus on growing your business,” Lalani says.

“You can exchange funds instantly, with absolute transparency, confidence and certainty.”

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