Evidence of meeting #151 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A recording is available from Parliament.
Liberal
Ryan Turnbull Liberal Whitby, ON
I don't know whether you've officially announced it, but I've flagged some articles on a flat-fee pricing structure that you're moving forward with. Have you officially announced that?
President and Chief Executive Officer, Interac Corp.
No, we haven't. E-transfer will be priced as a flat-rate fee in 2025. We're in the process of communicating that to the 230 participants.
Liberal
Ryan Turnbull Liberal Whitby, ON
Is that in line with what you just said, which is that you're committed to broadening access? How does that broaden access?
President and Chief Executive Officer, Interac Corp.
I think it helps broaden access. We're a regulated payment system; therefore, it's not up to us who can join e-transfer. We need to ensure the Bank of Canada is supportive of that. Flat-rate pricing, which is a common pricing schedule for real-time payment systems around the world, will clearly enable and help open access.
Liberal
Ryan Turnbull Liberal Whitby, ON
You said the Bank of Canada approved this. Is that correct? When did they approve it?
President and Chief Executive Officer, Interac Corp.
The Bank of Canada recently approved it. As with any pricing change in any of the prominent payment systems, we go through a lot of detail with the Bank of Canada to explain why we're making a change, what the benefits are and the consequences of doing it. There's a good length of time to ensure everything is very well understood before approval is given by the Bank of Canada.
They recently provided us with that approval, which gives us the green light to go ahead and talk to our participants.
Liberal
Ryan Turnbull Liberal Whitby, ON
Was that very recent? Was it within the last couple of weeks or the last few days? How recent was it, so I'm aware?
President and Chief Executive Officer, Interac Corp.
As I said before, we started this process a year ago. It was within the last four weeks that the Bank of Canada provided approval.
Liberal
Ryan Turnbull Liberal Whitby, ON
Wow, I'm doing very well.
We heard about your volume-based pricing model, which is how you've been doing things for quite some time. Help me understand how a flat fee is going to help the smaller players in this space—the fintechs that are trying to disrupt and work within this space. How is it going to help them get access and create a more level playing field, as you said earlier?
President and Chief Executive Officer, Interac Corp.
Volume-based pricing starts at a higher level. Let's say it starts at $100 to begin with, goes to $50 next and then goes to $10 as a third step. Just take that as an example. As you start your volumes, they would be priced at $100, and then when you get past a certain level, it goes to $50. When you get past that level, it goes to $10. Smaller players would be paying $100 or maybe $50 if they're medium-sized.
Flat-rate pricing would have a starting point that is much lower. Let's say that the starting point was $15, as an example. Your first transaction would be $15, and your second and last transactions would be $15. However many you go, they will always be $15.
Liberal
Ryan Turnbull Liberal Whitby, ON
That would certainly help smaller players, but it's still a strategic decision. I'm assuming you made that decision with your shareholders in mind as well. It must be better for business, or is it? Are you taking a loss on this new fee structure? I wouldn't think so. Is it just better business practice from your perspective? Is it serving your shareholders?
President and Chief Executive Officer, Interac Corp.
To your point, it's a big move for us. That's why it took a year—to ensure that we really understood all of the implications of doing it and ensure that we understood globally what was happening. It was then reviewed and approved by the independent committee, so the board was never involved.
The independent committee gave us the approval and, at that point, we then informed the board of what we were doing. We then went to the Bank of Canada, and pretty much that's where we're sitting now. We're preparing all the fee schedules and communications for 230 participants. Then we'll be looking at our communication strategy at that point afterwards.
Liberal
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Mr. Chair.
Thank you for being here, Mr. Wilmot.
President and Chief Executive Officer, Interac Corp.
Interpretation is not working.
Liberal
December 9th, 2024 / 6:25 p.m.
President and Chief Executive Officer, Interac Corp.
It's on English.
Liberal
The Chair Liberal Joël Lightbound
It should work. We're going to pause. In the meantime, the clerk will make sure it's working.
Liberal
President and Chief Executive Officer, Interac Corp.
Yes, it is. Thank you very much.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Mr. Wilmot, during testimony from representatives of the Competition Bureau, we learned that the bureau had a consent agreement with Interac from 1996 to 2020 regarding conduct that undermines competition in the relevant financial markets.
You're probably aware of that agreement. Why wasn't there a similar agreement on e‑transfers?
President and Chief Executive Officer, Interac Corp.
Yes, I understand the consent agreement from 1996 to 2020 regarding the Interac debit service. Interac e-transfer was not included in that; however, the Competition Bureau was involved in the structuring of Interac's corporation and the governance model around that. We are now talking to the Competition Bureau about their initial assessment into e-transfer.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Why were Interac transfers not part of the consent agreement?