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
NDP
Leila Dance NDP Elmwood—Transcona, MB
I feel like I'm always trying to clarify things for myself. Just to check, do you recommend a fee that your 230 businesses charge individuals? Is there any type of suggested price that a bank, caisse populaire or credit union would charge the consumer?
President and Chief Executive Officer, Interac Corp.
Interac is not involved at all in recommending an end-user price.
NDP
Leila Dance NDP Elmwood—Transcona, MB
That being said, they can charge Canadians whatever they want.
President and Chief Executive Officer, Interac Corp.
Interac is focused on business-to-business wholesale pricing.
There are 230 participants providing financial services to consumers and small businesses. That's a lot of companies competing in a market of 40 million people, including 30 million economically active people. There's a lot of competition to ensure consumers and businesses can choose whether they want to take financial services from a highly localized, smaller financial institution like a credit union, which plays a very important role in Canadian society, or want to take it from a national provider, like one of the designated systemically important banks, the D-SIBs, in Canada.
NDP
Leila Dance NDP Elmwood—Transcona, MB
Say I belong to a credit union, and currently I'm paying a dollar but they're only paying 20¢ for each electronic fund transfer that I send. Even if you lower it for them to 15¢ or 10¢—whatever that number is—that might not mean it's going to make any difference for me or Canadians in general. They're going to continue to charge whatever they want.
President and Chief Executive Officer, Interac Corp.
The e-transfer flat-rate fee will benefit the smallest players. That's the smallest credit unions. I think in the credit union—
President and Chief Executive Officer, Interac Corp.
No, absolutely Canadians. It's consumers and small businesses served by the credit unions.
The credit unions are served by aggregation companies like Central 1, as an example, that help to make e-transfers easier to consume and easier to operate. They play a fundamentally important role because some of these credit unions are small. One town can rely heavily on a credit union. The centrals play a very important role in that.
NDP
Leila Dance NDP Elmwood—Transcona, MB
I'm sorry. I'm conscious of my time.
When you put your flat-rate fee program in place in 2025, will Canadians know what the number is? Will that be public knowledge?
President and Chief Executive Officer, Interac Corp.
We are working through our communication strategy for the new flat-rate pricing. We are first informing the participants. After that, we will execute on the communication strategy, which we're currently reviewing. Once we review it, we'll execute on it.
There are many markets around the world that do publish their real-time settlement fee schedules. If Canada did that, it would be following the global best practice.
We have just received Bank of Canada approval for a flat-rate schedule. We haven't yet communicated to the participants. The right order to ensure stability of the system and that there are no surprises for anybody is that we follow these steps.
I'm not saying we're not going to do that, but we're reviewing it. I do understand that the global best practice is that you transparently publish it on your website. I understand that. We are discussing it, and then we'll execute on it in 2025.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much, MP Dance.
I will now turn to the Conservatives.
Colleagues, just so you know, we'll end the meeting at 7:30, as originally planned. You understand we have about 20 minutes left for questions.
Monsieur Généreux, go ahead.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chair.
Mr. Wilmot, your accent betrays you. You're from England, if I'm not mistaken.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
How would you describe the state of competition in England and other European countries?
Is there much more competition there than in Canada when it comes to the Interac equivalent?
President and Chief Executive Officer, Interac Corp.
The U.K. and Europe are two different things. Both have pursued what I'd call open banking, or consumer-driven banking, as we're talking about here, through payment services directives. They're actually on the third generation of a payment services directive—PSD3.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
That is not the case in Canada.
President and Chief Executive Officer, Interac Corp.
That's right. The consumer-driven banking framework that we're working through right now, which comes together with RTR and RPAA, provides a two- or three-year path for us so we're really at a point where we can accelerate open access and can accelerate innovation. Now it's about executing on the two- or three-year road map that's been put in place.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
In your opening remarks, you mentioned that you were trailblazers and great innovators.
Am I to understand that you're falling behind in terms of all the innovations that are emerging? I'm thinking of open banking and cyber-currencies, for example. If I understand correctly, you have some catching up to do.
President and Chief Executive Officer, Interac Corp.
Interac has innovated ahead of the world in many areas. I think the latest area is about business requests to pay account to account, verification and authentication capabilities, and AI-enabled fraud detection to avoid scams. There's a long history, such as with the digital wallets that I talked about and with chip and PIN. We have a strong innovation department. Our strategy is about bringing in innovative new use cases on our existing platforms today.
Interac has a strong innovation history that we plan to continue going forward.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
The Bank of Canada has just authorized you to set a fixed rate, but you're saying that you haven't yet had the opportunity to share the information with your customers—I guess that's what they're called.
In previous testimony, we heard that the rates could vary from $0.06 to $0.46 per transaction. Earlier, you explained to us that there would be a fixed rate based on categories A, B and C. I imagine that this corresponds to volume, that is to say low, medium or high.
Will clients whose volume of transactions corresponds to each of these categories see a real difference?
I imagine that the set rate for each of these categories will be different.
Is that the case?
President and Chief Executive Officer, Interac Corp.
The flat rate for e-transfer will be flat, regardless of whether there is one transaction or a hundred million transactions. It will be the same price. There is only one price and it will be flat.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Could you provide the committee with the set fee structure that you're going to put in place, once you've shared it with your members?