Thank you very much.
Good afternoon, Mr. Chair and members of the committee.
Thank you, indeed, for the invitation to appear before you today to discuss the e-commerce market in Canada.
I will start out with a brief overview of who we are and what we do, the services that we offer, and then focus on the key elements of our business that relate more specifically to your study. I will also comment on the importance of having a healthy, competitive payments market to facilitate commerce, both physical and electronic.
You have a brief deck in front of you and we'll follow along through there.
Interac is Canada's leading payment brand. Our organization operates a world-class, economical debit system that serves Canadians well. We are also Canada's only domestically run, coast-to-coast debit payment network, handling about 57% of all card payment transactions in Canada.
Canadians paid with Interac nearly four billion times last year. Indeed, we are among the world's most active users of debit cards on a per capita basis. Interac also has a strong and rooted history of being merchants' economical, flat-fee-per-transaction payment method.
We are a leader in the prevention and detection of debit card fraud, and consumers are fully protected from fraudulent transactions via our zero-liability policy.
We securely connect Canadians to their money at the ABM, at retailers in Canada and the United States, and online through web-based services: Interac Online and Interac e-Transfer. We are currently rolling out Interac Flash, a contactless enhancement of Interac Debit, and are moving our payment solutions forward into the mobile space.
With that introduction, I'll provide a little more detail about some of these products and enhancements, the ones that relate most directly to your study today, including our extensions into the mobile environment.
Let's start with Interac Flash. It is an enhancement of Interac Debit and Canada's first contactless debit payment solution. It also provides the platform for mobile NFC proximity payments. In fact, we plan to be in market with a mobile solution in 2012.
We estimate that Canadians make roughly $90 billion in purchases under $20 using cash and coin each year. Interac Flash allows cardholders the choice of paying for these smaller purchases faster than ever before by simply flashing an Interac chip debit card at a reader that supports Interac Flash, rather than inserting the card and entering a PIN. This increased speed helps merchants improve customer throughput by reducing the time they spend processing payments, particularly handling cash.
Interac Flash is secure and protected against tactics such as electronic pickpocketing. It leverages EMV-based secure chip processing, existing chip debit infrastructure, strong consumer protections, zero liability, and other features unique to Interac Association.
Scotiabank and RBC are the first financial institutions issuing Interac Flash cards.
In the online space, Interac Online is a unique solution that allows web-banking customers to securely make payments on the Internet directly from their bank account without providing any personal financial information to the merchant or service provider, not even a card number.
Despite what one of our competitors asserted at your last meeting, Interac Online is offered by more than a “handful” of merchants. Indeed, it is a growing service available at more than 750 Canadian online merchants, including Indigo, Cineplex, Roots, VIA Rail, telecommunications companies such as Rogers, Telus, and Virgin Mobile, and numerous universities, municipalities, and government agencies, including the Canada Revenue Agency.
Interac e-Transfer allows Canadians to send and receive money across the country in near real time, from one bank account to another. Transactions are done quickly and securely through web or mobile banking without the sender needing to know any of the recipient's banking information.
Available to more than 10 million web-banking customers through over 70 financial institutions and with a growing list of institutions offering e-Transfer through their mobile banking apps, this rapidly growing service represents a quick and cost-effective alternative to cheques and wire transfers.
While primarily a person-to-person solution, the service is also gaining popularity among small businesses, as an inexpensive and guaranteed way to received funds from customers. With future enhancements, e-Transfer also offers the potential to extend into the business-to-business and electronic-invoicing space.
Finally, having given you a sense of our role in the e-commerce arena, I want to close by discussing the importance of having a healthy competitive payments market to facilitate commerce. The payments landscape is changing rapidly, and how it evolves will have a significant impact on Canadian consumers, merchants, and businesses.
For the benefit of all stakeholders, including government, I believe that we must ensure that the payments marketplace in Canada remains healthy, competitive, innovative, safe, and secure, and that the system works for all participants. Sound regulation plays an important role in this outcome.
The code of conduct for the credit and debit card industry in Canada introduced by the Minister of Finance in April 2010 is an excellent example of a pragmatic solution to marketplace problems that has helped to promote more effective and fair competition. Despite what some market participants have argued, the code of conduct is not anti-competitive. On the contrary, debit competition at point of sale remains open, fair, and transparent. In fact, the code of conduct has helped to push competition into the open and to force payment networks and service providers to demonstrate value to end users as a condition to winning their business. As such, we believe that the fundamental public policy objectives of the code of conduct, most notably its focus on transparency and choice for merchants and consumers, can and should be maintained and applied to other payment technologies, including mobile.
Thank you. I look forward to answering your questions.