Evidence of meeting #19 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was technology.
A recording is available from Parliament.
General Manager, PayPal Canada
That's right, and if it's not, then we will help you to resolve it.
Conservative
Gerald Keddy Conservative South Shore—St. Margaret's, NS
That's a service that you have cornered that no one else has picked up on.
Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada
I don't think that's accurate.
Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada
Purchase protection is offered with each of our credit cards, and if you do buy something and you don't receive the goods....
If you buy something in Singapore and it doesn't arrive home in Canada—
Conservative
Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada
—you are protected, and you're also protected from fraud.
Conservative
Gerald Keddy Conservative South Shore—St. Margaret's, NS
I can't ask a question in 30 seconds, and I know better than to try. It wouldn't give the time to answer it.
Conservative
The Chair Conservative James Rajotte
All right.
Thank you, Mr. Keddy.
Mr. Caron, you have the floor.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you to all of you for your fascinating presentations on this inherently interesting topic.
As Glenn mentioned, I sat on the Standing Committee on Industry when we studied a very similar issue. So I am becoming more familiar with the topic.
My questions on EnStream technology are for Ms. Hall Findlay. This technology is really interesting, but I have some concerns regarding competition.
EnStream was established by Bell, TELUS and Rogers. The documents you sent say that the technology will be made available to all cell phone users, issuing institutions, and all the banks.
They also mention that the modalities will be standardized. Are these modalities known at this time? Is the technology currently available to all of the competitors of Bell, Rogers and TELUS?
Chief Legal Officer, EnStream
If you don't mind, I will answer in English, because it has been quite a while since I've had the opportunity to speak French frequently, and I have more trouble with the technical terms in French.
The question is in terms of competition and whether what we provide is openly available to everybody.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
It's actually more on what the modalities are right now that make the technology available to all the competitors, of Bell—
Chief Legal Officer, EnStream
The technology that we provide is already in use by Bell and Telus. We're in pilot with a couple of the banks. We hope to have that launched very soon. I think you'll find in Canada that there will be a lot of announcements over the next number of months. We're all very excited about it.
We have made it very clear right from the beginning that our model is in effect a utility, that it is beneficial to all of the players to have it available to all of the players. On the mobile network side, any mobile network operator in Canada is free to come to EnStream and say they'd like to participate. In fact, for the most part our business model has been a cost recovery one to date, partly because we all benefit from the increase to the ecosystem.
It might be useful to use an example of what's happening that's very different in the United States. The entity in the United States that is similar to EnStream—it's not the same—is an entity called Isis. It's owned by T-Mobile, Verizon, and AT&T. It is actually a closed shop. They've set it up very much as a money-making entity, to provide service, when they are able to, through very expensive licensing to other carriers. It's a bit different in the States because there are way more carriers— there are a lot of smaller ones—and there are way more financial institutions.
In Canada, we've seen the benefits, with past technologies, of that kind of ubiquitous approach, that we all benefit from the increase in the ecosystem. However, when you talk about the competitive piece, the other part that's very important is to understand that Rogers gets no benefit by saying, “We're the only ones who can offer this, so we're going to get RBC, or this bank, instead of the rest of you”. There might be a slight advantage timewise, but one third of RBC's customers are on Rogers, one third are on Bell, and one third are on Telus. Then, of course, there are others in other parts of the country. That's in terms of market share. They all want to have all of the players participating.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Our time is short. I have a quick question on this, and then I have a last question.
Are you going to make the technology available for free, or through royalties, or a low fee, for example, for those competitors who want to access the technology?
Chief Legal Officer, EnStream
It can't be free because we would lose money. We have structured it, so far with all of the carriers that have come to us, for the most part on cost recovery. I mean, we're still in stages of trying to figure out what those are because of some of the challenges that occur in deployments with any technology. It very much is something that we have made clear, certainly in similar circumstances, to the existing carriers that own us—absolutely.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I'll ask my question. You're free to try to answer it at a different time.
In terms of the protection of data, we've heard the story about the metadata being collected in airports. I'd like you to tell us how personal data, especially our personal financial data, will be protected against that type of intrusion. If it's possible, for example, for our security services to collect that metadata in airports the way they did, what would prevent anybody who potentially has a similar technology from doing the same?
Conservative
The Chair Conservative James Rajotte
Maybe you could give a brief response now, and if we want to follow up later we can.
Chief Legal Officer, EnStream
The first response is that whether it's RBC's solution, where the customer data is in their cloud behind their firewall, or the other NFC solutions, where the information resides on the SIM card, all of that information has been encrypted, de-encrypted, re-encrypted. The level of encryption and security is extraordinary. There is no way for somebody to see personal information based on what is actually residing on the SIM card. That's one of the reasons this is moving forward so well, because of that level of security.
Conservative
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you very much, Mr. Chair, and thank you to our witnesses for being here today.
I'm going to follow up a little bit on Mr. Caron's line of questioning. I want to understand how this all fits together.
Ms. Burke, you said that the secure nature of your transaction in the cloud is downloaded every time you do a specific individual transaction, as opposed to.... I'm still carrying that information in my digital wallet, though. Is that not true?
Vice-President, International Cards and Canadian Regulatory Payments, Royal Bank of Canada
There is very little on your mobile phone. It would be simply a way to go to the secure cloud, get the data that's required, and then deploy it as the merchant requires.
If you think of it, your phone has basically nothing on it. It's all in the cloud behind a firewall.
Chief Legal Officer, EnStream
Just to explain, RBC's solution is unique. It's the first deployment that's in the cloud. CIBC has deployed with both Rogers and Telus, so I think technically we have three deployments now. But those two, the credential information, the credit card information, encrypted and all, are actually resident on the secure element of the SIM card.
It is different as a solution, but the information that is on the SIM card in those other two solutions has been so heavily encrypted and dealt with that it's not something that anybody would be able to use. There's been a great deal of effort into making sure that's the case.