MAr/Apr 2019

The Merchant’s Guide to Transactions, Cards & e-Commerce

Evolving Canada’s iconic

loyalty programme
❱ How to drive mobile
wallet adoption
❱ Why daily pay for
gig workers
❱ Securing payments
in a connected world PM 4 0 0 5 0 8 0 3
 TableKey
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March/April 2019
Mobile Payments
Volume 10 Number 2

Editor-in-Chief
4 2019: Another landmark 7 Developing a digital
Steve Lloyd year for mobile payments payments infrastructure
steve@paymentsbusiness.ca
Editor
6 How to drive mobile 8 The digital payments
Brendan Read wallet adoption opportunity
brendan@paymentsbusiness.ca

Alternative PAyments
Publisher
Mark Henry
mark@paymentsbusiness.ca
Contributors 11 Why daily pay 12 Survey: Canadians turning
Ryan Ahern; Gord Jamieson;
Anurag Kar; Daniel Kornitzer;
for gig workers to alternative payment
Susan O’Brien; Allen Pettis; Mikko methods
Rieger; Gary Schwartz; Chris Seip

Open Banking
Creative Direction
Jennifer O’Neill
jennifer@paymentsbusiness.ca
Photographer 14 Why open banking
Gary Tannyan

points & Rewards

President
Steve Lloyd
steve@paymentsbusiness.ca
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March/April 2019 PAYMENTSBUSINESS 3

 Mobile
Payments
2019: Another
landmark year for
mobile payments
By Daniel Kornitzer
I
ncreased mobile penetration and a growing level of
consumer comfort with making payments through
a smartphone or tablet continues to impact
consumer spending habits across the globe, including Canada.
To measure the impact of this trend, Paysafe surveyed consumers
from Canada, the U.S., U.K., Germany and Austria for Lost in
Transaction: Payment Trends 2018, our annual consumer research
report. The results painted a clear picture of how improved
technology, changing consumer habits and new regulations are
reshaping the role of mobile in making card present (CP) and card
not present (CNP) payments.
In the report, nine per cent of consumers stated that they had
made purchases in-person using mobile wallets in the past month.
At the same time, 10 per cent of consumers from the same regions
that were questioned on this topic confirmed that they had made a
purchase in-app during the previous month.
And this isn’t a trend that will fizzle out in 2019. Here are the
factors that will ensure mobile payments continue to be at the
forefront of payment innovation for the foreseeable future.
The role of biometrics
Mobile or m-commerce, even with mobile-optimized web pages or in-
apps, has often been clunky, delivering a poor user experience due to
a lack of mobile native payment authentication processes. However,
the introduction of biometric authentication through fingerprint
technology or facial recognition is a significant upgrade in this area.
This will be particularly relevant as Visa and Mastercard roll out their
new 3D Secure 2.0 authentication process, of which authentication
by “who you are” (biometrics) will be a key component.
And not only will a vastly improved authentication process make CNP
payments on mobile more appealing for a user experience perspective,
biometric authentication will also likely appeal to consumers with
security concerns about making online payments. Indeed, 64 per cent
of Canadian consumers and an even higher proportion of Americans
surveyed (68 per cent) by Paysafe said that they found two-factor
authentication systems more appealing when shopping online.
4 PAYMENTSBUSINESS
Contactless payments gaining momentum
In the U.K. the adoption of contactless technology, which has been
part of the payment landscape for over a decade, has skyrocketed. In
Lost in Transaction, 54 per cent of U.K. consumers told us that they
had made a contactless payment in the previous month. According
to a recent Mastercard report, almost half (46 per cent) of all in-store
transactions in that country are today made via contactless.
While the majority of contactless transactions are still made using
credit and debit cards, consumers that have adopted mobile wallet
technology are overwhelming positive about its benefits, leading
us to believe that we will see greater adoption moving forward.
An overwhelming majority (84 per cent) of mobile wallet adopters
said that paying using their mobile devices was more convenient
than cash and over three-quarters (77 per cent) agreed that mobile
wallets were more convenient than contactless cards.
We expect to see the number of mobile wallet users rise in 2019,
as awareness of their benefits filter into the mainstream. Adopters
will also use their mobile wallets more frequently. A large majority
(85 per cent) of current mobile wallet adopters told us that they
would be using their mobile wallets much more for making payments
by 2020. Furthermore, three quarters (74 per cent) stated that they
would use their mobile wallets to pay for higher-priced items if the
value limit for contactless payments was raised.
And whilst adoption of contactless technology in North America
is generally much lower than in the U.K., awareness of mobile
wallets is more equitable. Four out of ten Canadians (42 per cent
and more than half (54 per cent) of American consumers have used
a mobile wallet to make a payment, compared to 56 per cent of U.K.
consumers. And close to two-thirds of North American consumers
—58 per cent of Canadians and 61 per cent of Americans—revealed
that they preferred to shop at stores that offered contactless
payments at the checkout.
But perhaps the biggest driver of in-store mobile wallet adoption
in 2019 and beyond will be the manner with which businesses are
embracing the new technology.
For our Lost in Transaction: The future of payments for SMBs
report, published in October 2018, we asked small and medium-sized
March/April 2019

businesses (SMBs) about their priorities for improving the checkout
experience. Raising the number of available payment methods and
increasing the speed of the checkout were the key takeaways. For
these reasons, the number of businesses in Canada and the U.S. that
accept in-store payments by mobile wallets is expected to increase
by more than 100 per cent by 2020, from a total of 29 per cent to
62 per cent.
Consumer appetite
Much as the adoption of contactless as a solution allowing more
convenient commerce payments, consumers also now demand a
secure and convenient alternative to cash when making payments
to friends, family or peers.
This is why demand for peer-to-peer payment (P2P) capabilities
through digital apps has been a growing trend for several years,
particularly in the U.S., with quarter-on-quarter payment volume
growth exceeding 20 per cent for several industry leading providers
in this area1. It was predicted that 63.5 million Americans (32 per
cent of smartphone users) made a payment on a P2P app in 2017,
according to eMarketer’s research2. This figure grew to 82.5 million
users in 20183.
march/April 2019
Mobile
Payments
It is unsurprising that tech giants, including Apple, Facebook and
Google have launched products that will continue to boost adoption
of these apps. Industry commentators have predicted that the total
transaction value of mobile P2P payments will have grown 37 per
cent in 2018 in the U.S. to $167 billion and this figure could rise to
surpass $300 billion by 20214.
Whether it is a payment via a P2P app on a smartphone, the rising
use of mobile wallets or more sophisticated biometric technologies
for payment authentication on a mobile device, the future of
payments is on the move: quite literally.
Daniel Kornitzer is chief business development officer, Paysafe Group
(www.paysafe.com). Daniel is responsible for developing strategic partnerships
designed to meet customer needs and grow new revenues. He has over 20 years’
experience in technology management. Daniel holds a B. Eng. in Electrical Engineering
from Ecole Polytechnique, a M.Eng. from McGill University and a diploma in Network
Engineering from the University of Toronto.
1 Rahul Chadha, “Mobile Proximity and Peer-to-Peer Payments 2018”, report, eMarketer,
August 13, 2018.
2 eMarketer, “P2P Payment Transactions to Exceed $120 Billion This Year”, report, July 18,
2017.
3 Caroline Cakebread, “Who's Using P2P Payments in the US?”, infographic, eMarketer,
December 5, 2018.
4 “Zelle Will Overtake Venmo in 2018”, article, eMarketer, June 13, 2018.
PAYMENTSBUSINESS 5
 Mobile
Payments
How to drive mobile
wallet adoption
By Ryan Ahern
P
ayments are driven heavily by consumer
behaviour and preferences, making it only
natural that mobile wallets would catch on
as smartphones have essentially become extensions of consumers.
However, despite the move to contactless payments, mobile wallets
have not been as readily adopted by merchants and consumers.
But accepting all forms of electronic payment methods, including
magstripe, EMV and near-field communications (NFC)/contactless is
only half the battle. Merchants need to make sure customers are
aware that they can pay with mobile wallets such as Apple Pay and
Google Pay and that their staff can guide them at the point of sale
(POS).
Here are several options for driving mobile wallet adoption.
Pushing wallet use. It is in the merchants’ best interests to drive
mobile wallet adoption as it can benefit them immensely, including:
• Faster speed of transaction. A quick checkout creates efficiencies
for merchants as they are able to serve more customers;
• Stronger security. Mobile wallets use tokenization to replace the
cards’ original account numbers, providing enhanced transaction
security and assuring customers their card data is safe; and
• Enhanced brand perception. Acceptance of NFC/contactless
payments helps improve consumers’ perception of merchants and
their commitment to cutting-edge technology.
Merchants that are active in how they alert their customers to
the contactless capabilities have the opportunity to process more
transactions each day. But also critically, they would be able to boost
how their brands are perceived by their customers. These factors
could enhance customer loyalty and attract more clientele, hence
generate higher profits, by creating a superior shopping experience
while keeping costs down through greater productivity.
In-store signage. A barrier that’s hindered mobile wallet adoption
is unclear payment direction at the POS. Consumers want to reach the
checkout and minimize any time spent waiting on payments. With
POS systems capable of accepting any number of payment forms,
this means if it’s not immediately clear what’s accepted, customers
will revert to whichever they’re most comfortable with (often a more
traditional method like magstripe or cash). If a customer is hung up
even momentarily, they could become frustrated and be less likely to
attempt to pay using mobile wallets or contactless cards again any
time soon.
Implementing in-store signage makes it clear to customers that
6 PAYMENTSBUSINESS
NFC/contactless transactions are an accepted, important and simple
way to spread awareness. Card brands such as Visa offer free POS
signage for contactless that merchants can download and affix
on payment acceptance devices. Stickers to show mobile wallet
acceptance are also available from Apple and Google; cashiers can
point to these signs to remind customers they are able to pay using
their smartphones. The end goal is to make it so clear to consumers
how they can pay via mobile wallets so that merchants don’t risk
losing mobile transactions over moments of frustration.
Training staff. Some merchants that are capable of accepting
NFC/contactless payments have even lost out on mobile transactions
because they’ve neglected to turn those capabilities on at their POS.
Employees who don’t know that mobile wallets are accepted and
who aren’t trained well enough to walk customers through the
payment process contribute further to the problem when they can’t
communicate to customers what payments are accepted. This lack
of education among merchants can affect the checkout experience
for shoppers and discourage mobile payment adoption.
Merchants should train their staff on how to accept mobile wallets
at the point of service. They should also be able to articulate where
on the payment devices consumers should tap their contactless cards
or smartphones. While the terminals or card readers should clearly
indicate where to tap the devices or cards, often staff will need to
direct the cardholders. This helps ensure a smooth transaction process
and encourages shoppers to use this payment method more often.
Merchant employers should also encourage employees to get
and use mobile wallets. This way staff becomes well-versed in the
technology and be able to help customers to pay with this method.
It is up to the merchants
Enabling NFC/contactless payments is just the beginning of the
journey for merchants. By motivating customers to use mobile
wallets, they are not only enhancing the checkout experience, but
they are also creating efficiencies within their businesses.
Merchants’ success hinges on being able to evolve at the pace
of their customers’ changes preferences. The technology is already
largely in place for mobile payment adoption to grow exponentially
in North America. But it is up to merchants to close the gap between
the payments technology they offer and the payment method their
customer reaches for first at the point of sale.
Ryan Ahern is payments solution manager, Ingenico Group North America
(www.ingenico.com).
March/April 2019

Developing a
digital payments
infrastructure
By Mikko Rieger
B
anks and credit unions are struggling with
complexity and how to manage competing
priorities. Mobile payments are growing
by more than nine per cent a year, with more than 70 per cent
of Canadians using their mobile devices for sending and receiving
money1. Now too, consumers are showing increasing interest in
Internet of Things (IoT) payments, including wearables, smart fridges,
virtual assistants and soon, connected cars.
This means that banks and credit unions need a back-end
infrastructure that can flex to accommodate new and diversifying
payment-enabled form factors. Furthermore, open banking is
coming to Canada. According to PwC, it’s only a matter of time
before this fundamentally reshapes the payments industry2.
These concurrent industry developments are creating the following
pain points:
• If open banking and account personalization services aren’t made
available on smartphones, then consumers won’t use them, and
banks won’t be able to leverage them to differentiate themselves
and create revenue;
• If tokenization isn’t used to secure transactions initiated from
mobile devices, then an increasing amount of payment and
account data will not be adequately protected; and
• If payment-enabled connected IoT devices, which have been
growing in popularity in the Canadian market3, aren’t supported
in the back-end by issuers, their card offerings may become
obsolete once these devices become mainstream.
Virtual cards and the existing card infrastructure enable these
services. However, legacy systems are holding issuers back from
responding fast enough to changing market conditions.
According to Ovum, nearly two-thirds of banks believe their
payments infrastructure will need a significant upgrade in the next
three years as the back-office domain becomes a key part of their
digital strategy4. But this is a massive undertaking, and issuers are
understandably wrestling with how best to approach it.
To streamline the process and ensure that they reach the best
solution, here are the key questions to ask when developing a card,
mobile and IoT payments infrastructure strategy.
march/April 2019
Mobile
Payments
1. Is outsourcing right for my bank or credit union, or should we
keep development in-house?
(a) Can your existing consumer management system (CMS)
support the growing and evolving payments ecosystem?
(b) Do you have a large enough team of developers experienced
in this area to build your own infrastructure and implement it
with minimal disruption to end users?
(c) Will the significant capital expenditure be recouped quickly?
(d) Are you confident in your technical ability and capacity to
quickly create an infrastructure that enables scalable, value-
added financial services that can be accessed on any connected
device?
If your bank or credit union can answer “yes” to all of the above,
then there’s no reason that you couldn’t develop and manage your
infrastructure internally. If the answer to any of the above is “no”,
however, outsourcing may be the best approach.
2. We’re going to outsource our infrastructure upgrade. Should
we go with a software-only or full-service provider?
(a) Do you need to launch new products quickly to ensure faster
creation of new revenue streams?
(b) Would you benefit from bespoke technical support in
developing new and innovative services?
(c) Would you benefit from informed regional support and a
collaborative development process that takes your institution’s
individual needs into account?
(d) Do you want to be able to guarantee your end users a stable
infrastructure with high availability?
(e) Are you moving towards a lean fixed-cost setup, so building
and maintaining a team to manage a provider and realize the
upgrade isn’t high on your list of priorities?
If the answer to any of the above is “yes” then a software-only
provider may not have the capabilities required to successfully
implement and manage card, mobile and IoT payments infrastructure
on an issuer’s behalf.
Continued on page 9
PAYMENTSBUSINESS 7
 Mobile
Payments
The digital payments
opportunity
By Anurag Kar
S
o much of our daily lives is online, digital and
on-the-go, whether it’s how we communicate
with each other, how we learn about current
events or consume entertainment and increasingly how we conduct
business and make purchases.
Naturally enough, businesses from large retailers to financial
services providers and even sole proprietors in the gig economy
will rely more and more on digital payments to transact with their
customers and suppliers.
What does this mean for businesses that want to grow?
The speed and effectiveness of how businesses adopt digital
payments solutions will play an increasingly larger role in how they
connect with customers, disburse payments, manage cashflow and
grow revenue.
As Canada’s leading payment and digital information network,
Interac has unique insights into how consumers and businesses
alike are embracing digital payments: and how both consumers and
businesses are using Interac e-Transfer at record levels for a wide
variety of payments.
A surge in digital payments
2018 was a banner year for digital payments in Canada. At Interac,
we saw an unprecedented surge in the use of Interac e-Transfer
both by consumers and businesses. There were 371.5 million Interac
e-Transfer transactions: which represents a 54 per cent year-over-
year growth in transaction volumes. That’s the highest level of
growth since 2005. More specifically, Interac e-Transfer was used by
Canadians more than one million times per day.
To put this in dollar terms, the total value of Interac e-Transfer
transactions in 2018 was $132 billion, a growth of 45 per cent
from 2017.
While we’ve seen year-over-year growth with our Interac e-Transfer
platform, we’ve simultaneously seen growth in the service’s mobile
adoption, with more than 76 per cent of all transactions being
deposited on mobile devices. This data point shows that users are
not just embracing the ease and convenience of digital payments,
but they are taking to mobile payments as well.
Driving digital
In helping to understand the surge in the use of digital payments, one
particular statistic stands out as encouraging—both for the continued
growth of the service—and for businesses that want to better
8 PAYMENTSBUSINESS
understand the changing payments landscape. In 2018, the average
transaction value of an Interac e-Transfer was $357. Comparing that
to six years ago, that number has come down from $465.
Pairing this measure with 2018’s surge in frequency is a clear
indication that customers and businesses are making digital payments
a regular part of their daily lives, in how they transact and how they
do business. The feeling among Canadians that digital payments are
becoming more normalized and more integrated into their routines
will only continue to drive usage growth.
Opportunities for consumers, businesses
The unprecedented surge in digital payments provides a wide range
of opportunities. At the consumer level we’ve seen an embrace of
digital payments for transactions that range from making group
purchases—for example, sharing the cost of a meal of a trip to the
movies—to paying a babysitter or dogwalker.
Our numbers demonstrate that Interac e-Transfer has become
a trustworthy payment solution known for its speed, security and
convenience. The latest additions to the platform are now making it
that much easier for everyday use.
One of the newest options for users the ability to Request Money,
a feature that makes it easier for individual consumers to make group
purchases. But there are significant opportunities for businesses
as well. Coupling this feature with Autodeposit—which has four
million registered users—provides businesses with the opportunity
to streamline their invoicing and payments to create seamless real-
time payment (RTP) processes.
Moving to RTP
For many years, the majority of businesses have relied on cheques
and electronic funds transfers (EFTs) for their payments. But these
options can still be subject to clearing delays and liquidity issues.
This is payments the old-fashioned way. It’s not real-time and it
imposes burdens on companies and their back offices.
In contrast, RTP offer speed, efficiency, convenience, transparency
and security. RTP solutions like Interac e-Transfer are the future
of digital payments for businesses of all sizes. Smart businesses
can capitalize on this surge in consumer adoption of this payment
platform. This presents businesses with opportunities to improve their
cash flow through quicker payments and potential revenue growth
by providing a smooth payment experience for their customers.
For sole proprietors, features like Autodeposit and Request Money
offer a solution that eases administrative burden and increases
March/April 2019
 Mobile
Payments

convenience. With Interac e-Transfer Business Payment Services, business
owners can use one platform to receive customer payments, pay rent,
manage supplier and vendor invoices and streamline payrolls.
For businesses, RTP offer a solution for both high-volume
commercial transactions as well as lower-volume transactions. In
fact, in 2018 alone, businesses sent $465 million through Interac’s
e-Transfer Bulk Disbursement feature.
And for large commercial businesses, the growing ubiquity of
RTP technology offers significant opportunities for back-office
efficiencies in their business-to-business (B2B) transactions and in
their transactions with individuals. When combined with enhanced,
automated data analytics they give businesses more time to focus on
revenue growth and customer service.
Taken together, the growing adoption of digital payments by both
consumers and businesses—alongside the further integration of
these technologies into our daily purchasing, spending and business
routines—is a trend that will only become more ubiquitous as
technology improves. Businesses of all sizes should take advantage
of these opportunities to maximize their connection with customers,
the efficiency of their payments processes, and the ease and speed
of real-time payments.
Anurag Kar is Interac’s director of digital push payments.
Developing a digital payments
infrastructure
Continued from page 7
3. We have identified a full-service CMS provider. What questions
should we ask them to ensure they’re the right choice?
(a) Does it have migration experience?
(b) Is the solution flexible enough to adapt to future consumer
demands and new financial products?
(c) How smooth is the onboarding process? How much disruption
to our end users will there be? Can we migrate product by
product, instead of all at once, to mitigate possible risks?
(d) Can the solution be expanded to cover value-added services
beyond CMS?
To learn more about the challenges and opportunities behind
upgrading your card infrastructure, download our eBook Payments:
Card vs Mobile vs IoT. Does it Even Matter?
Mikko Rieger is senior vice president of consumer management services (CMS) at Nets
(https://www.nets.eu/). He has a background in software platforms, cloud adoption
and telecoms and has worked across Europe and North America. He holds a B.Eng.
in electrical engineering, a Dipl. Ing. In computer engineering, a Master’s degree in
engineering management and an MBA in finance, entrepreneurship and innovation
from Northwestern University.

Central 1 blends invoicing, 1 Research and Markets, “Canada Mobile Wallet and Payment Market Opportunities (Databook

payments with Request Money

Series) - Market Size and Forecast across 45+ Market Segments”, January 2019.
2 PwC, “Canadian Banks 2019”, report.
3 Michael Tompkins and Viktoria Galociova, “Canadian Payment Methods and Trends: 2018”,
Central 1 has integrated the Interac e-Transfer® Request Money Payments Canada, report, December 2018.
4 “Banks see payments infrastructure renovation as key to digital strategy,” Finextra, October
feature into its small business online invoicing and payments product. 22, 2018.
This single digital platform means fewer fees for small business users
than with traditional online payment solutions by enabling them to
access funds directly from bank accounts and avoiding costly credit
card fees.
“For small businesses in particular, the timely collection of
outstanding payments is crucial to their success,” said Central 1 For breaking news and in-depth features,
senior product manager Randy Johal. “This integrated invoicing and
visit our website at
payments solution leverages Interac e-Transfer Request Money, an
enhanced user feature, combining two steps into one and, in turn, www.paymentsbusiness.ca
more quickly putting the hard-earned money back into the pockets
of small business owners.”
Saskatchewan-based Synergy Credit Union is the first credit union
to offer the service to small business members.

.ca
“We’re always looking for ways to serve the growing small
business community in the areas we serve,” said Trevor Beaton,
Synergy chief innovation and people officer. “Through this exciting
partnership with Central 1, we’re able to leverage innovative
technology to provide our members with a more simple, streamlined
and faster invoicing and payments experience. Credit unions are
already the financial institution of choice for small business owners,
and Request Money integration with online invoicing stands to
bring the community a tremendous amount of added value and
efficiency.”

march/April 2019 PAYMENTSBUSINESS 9

How payments are made and managed payments is
undergoing an exciting evolution. Examples include:

• Contactless cards and mobile wallets

• Internet of Things
• Real-time payment rails
• Blockchain and cryptocurrencies
• ATM, cash and cheque modernization

But security and fraud risks also are rapidly evolving.

There are new techniques, tools, standards and

regulations to facilitate fast, intuitive, transparent and
secure transactions and processing.

Payments Business (www.paymentsbusiness.ca),

published by Lloydmedia, keeps track of these trends
and provides thought leadership from industry experts.

For advertising and media partnerships contact

Mark Henry, Publisher

mark@paymentsbusiness.ca
905-201-6600 x223

For news and contributed articles contact

Brendan Read, Editor

brendan@paymentsbusiness.ca
905-201-6600 x227

Payments Business is a Lloydmedia, Inc publication.

Lloydmedia also publishes DM Magazine, Contact Management magazine
and Canadian Equipment Finance magazine.

Why daily pay
for gig workers
By Chris Seip
I
n Canada, and across the globe, we’re seeing
the emergence of a gig economy that is fuelled
by on-demand workers. According to EY, the U.S.
contingent workforce has grown by 66 per cent in the past 10 years1.
Ride-hailing services are one of the largest users of contingent
workers. Today, our estimates show that over 25 million drivers
around the world drive for the three largest companies, Uber, Lyft
and Didi in the ride hail space.
Financial vulnerability
In contrast to the past, when employees typically put down deep
roots and rarely changed careers or even employers, the gig economy
is built on temporary, flexible jobs that are filled by independent
contractors and freelancers.
But the gig economy also presents some unique challenges.
Traditional weekly or bi-weekly payment cycles do not meet the
needs of the on-demand workforce, thereby leaving them financially
vulnerable.
Based on Payfare driver data, a typical on-demand driver works
full or part time up to 18 days per month, earning $1,180 per month.
These earnings are usually carefully allocated towards rent, food,
childcare and transportation down to the last cent.
Problems occur when an unexpected expense arises. For a ride
hail or instant delivery driver, vehicle maintenance or repair or a
rise in the cost of fuel could suddenly leave them unable to work if
payday is still days away. Alternatively, they may be forced to turn to
credit cards, credit lines or steep payday lending rates to cover the
expenses: which often begins a cycle of debt they cannot break.
Unexpected expenses aside, the rising cost of living and the
growth of income disparities are making it difficult for on-demand
workers to cover basic living expenses. To illustrate, even in the face
of a stronger economy 40 per cent of American households cannot
cover a $400 expense2 while 78 per cent of American households
live paycheque to paycheque3. While these statistics are concerning,
there is a solution that creates affordable and effective working
capital solutions for better cash flow to cope with every day and
unexpected expenses. The solution is instant pay.
Financial inclusion
Instant pay or “pay while you’re earning” can transform the lives of
gig workers by providing them with financial inclusion and literacy.
By giving gig workers immediate access to 100 per cent of the net
march/April 2019
Alternative
payments
money they’ve earned, while they’re earning, they have better cash
flow for bills, groceries, fuel and vehicle maintenance. Instant pay
gives them the ability to take care of their needs, setting saving
goals and ensuring they aren’t beholden to pay cycles, credit cards
or exorbitant payday lending rates.
Although some individuals believe traditional bi-weekly payment
cycles encourage financial management, and instant pay would fuel
irresponsible spending, this is not the case. Access to daily earnings
encourages workers to spend within their earning potential rather
than beyond it. Daily or instant pay give workers greater control over
prioritizing payments so they can reduce debt on high-interest credit
cards and loans, which is critical to a sound financial strategy. It helps
them avoid unnecessary expenses such as overdraft fees and steep
payday lending rates. Also, by knowing exactly how much money
they have, gig workers can increase their work and their earnings
when unexpected expenses are incurred.
Pay cycles contract
Currently, traditional employers provide data for payrolls which
in turn are directly deposited into employees’ bank accounts.
However, in the gig economy, workers will benefit most if earnings
are generated daily and provided to a payroll solutions company.
Businesses enrolled with an instant pay solution offered by it then
provide their workers with mobile banking applications paired with
debit cards. Individuals can then perform all of the transactions
offered through traditional bank accounts for a fraction of the cost,
including cashing out their earnings multiple times daily, viewing
their card balances, transaction and earnings histories, transferring
money, paying bills and depositing cheques.
The emerging gig economy can’t thrive with traditional payment
cycles. By disrupting them, and enabling same-day earnings, instant
pay delivers financial inclusion to gig workers globally.
Chris Seip is chair and CEO of Payfare (www.payfare.com), a financial technology-
operations company that provides instant pay, every day to businesses and their
workers. Payfare’s proven, in-market, scalable solution is backed by major investment
firms and financial institutions around the world and has strong partnerships with
Mastercard, issuers, processors, card manufacturers and other providers.
1 David Storey, Tony Steadman and Charles Davis “Is the gig economy a fleeting fad, or an
enduring legacy?”, EY, report, 2016.
2 Federal Reserve Board, “Report on the Economic Well-Being of U.S. Households in 2017”,
report, May 2018.
3 CareerBuilder, “Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers,
According to New CareerBuilder Survey”, press release, August 24, 2017.
PAYMENTSBUSINESS 11
12
Alternative
payments

PAYMENTSBUSINESS
Survey:
Canadians
turning to
alternative
payment
methods
espite being one of the highest banked populations in the
world, Canadians are increasingly turning to alternative
D payment tools, including mobile, PayPal and prepaid.

March/April 2019
A new study, "How Canadians Pay Today", commissioned by the
Canadian Prepaid Providers Organization (CPPO, www.cppo.ca),
revealed that the use of these means, led by prepaid, has increased by
14 per cent since 2016.
Detailed findings and trends include:
• As cash purchases continue to slow, consumers are ready
for non-traditional banking. Nearly two-thirds (65 per cent) of
consumers have made fewer cash purchases than the year before,
compared to 58 per cent in 2016, especially Millennials (75 per
cent). While the vast majority (99 per cent) of Canadians have
bank accounts, around three in ten (29 per cent) want to sidestep
traditional banking in favour of new tools that offer convenience
and cost savings;
• Credit and debit cards remain popular, but adoption of
alternative payment tools is on the rise. Credit and debit
cards are used most frequently by Canadians (40 and 33 per cent
 respectively), followed by cash (18 per cent). However, 73 per cent—
up from 59 per cent in 2016—have started using other payment
technologies, including PayPal (55 per cent), prepaid cards (27 per
cent), Apple Pay (11 per cent), Google Pay (seven per cent) and
other mobile payments (seven per cent). But prepaid cards saw the
highest growth, jumping 17 percentage points since 2016. Among
those using these tools, six in ten (61 per cent) of Canadians say
they are comfortable with their security;
• Canadians are turning to new tools and apps to help them
budget. More than four in ten (43 per cent) Canadians struggled
to stay within their budgets in the past year and 23 per cent often
have running balances on their credit cards. Canadians find that
certain tools are useful in helping them stick to budgets, including
easy-to-use online tools that track spending (46 per cent) and
budgeting apps (43 per cent) as well as reloadable prepaid cards
free of interest charges and overdraft fees that limit spending (34
per cent). Three in ten (31 per cent) currently use apps to manage
their finances. Moreover, nearly half (46 per cent) with children
under 18 years old would give them spending allowances on

march/April 2019
prepaid cards to help control and monitor their spending; and
• Evolving workplace arrangements and technology call for
real-time pay. Statistics Canada estimates that 2.18 million
Canadians are taking part in some form of temporary work1.
Evolving workplace arrangements and technology are shaping
payment expectations among the workforce. Six in ten (62 per cent)
Canadians said they feel more loyal to a company that pays them
in real time and 39 per cent would prefer to be paid via prepaid
cards. Prepaid capabilities are rapidly replacing cheques as a less
expensive and more secure option for issuing payments, incentives
and disbursements. A third of workers (33 per cent) prefer to
receive incentives through a prepaid card to enjoy real-time fund
availability and flexibility in redeeming their pay.

The CPPO is the voice of the rapidly growing $3.8 billion Canadian
prepaid payments industry. Prepaid has grown rapidly as a major
form of electronic payment without involving credit. It is being used
to power new FinTech and PayTech solutions aimed at improving
customer experience, financial inclusion and faster payments delivery
through its ease of use and ubiquity of acceptance.
“As Canadians increasingly opt for non-traditional banking
solutions, they are raising the bar for a faster, frictionless experience
and added convenience in the entire payments industry,” said Peter
Read, CPPO chairman of the board. “Prepaid has emerged as a
popular foundation for innovations in bank account replacement,
money transfer, in-app payments and more.”
1 BMO Wealth Management, “The gig economy: achieving financial wellness and confidence”,
Insight, July 2018.

PAYMENTSBUSINESS
13
 Open Banking
By Gary Schwartz
O
pen banking is the creation of well-defined
protocols and standards for sharing and
exchanging real-time data in a secure and in
a trusted manner between financial institutions, third parties and
customers. The market is demanding modernization. Payments
Canada is looking to the key requirements to compete globally.
Worldwide there is an effort to enable real-time, data-rich ISO 20022
payments (the standard for electronic data interchange between
financial institutions).
We know speed and data power this modernization. Open
banking is a crucial prerequisite. It aligns with the Government of
Canada’s mandate to become a global player in innovation, data
and technology. An open banking mandate in Canada will position
our country as a global leader, alongside the European Union and
the United Kingdom.
Department of Finance Canada is conducting a review of open
banking. As the president of the Canadian Lenders Association (CLA)
we have submitted a response as we view open banking standards
as an essential step in normalizing the Canadian marketplace and
bring vibrant, customer-first financial services to our economy. It is
the next step and the natural evolution of Canada’s banking and
financial services.
As payments and financing services evolve and modernize, multiple
stakeholders need to work together to develop the appropriate risk,
policy, liability and compliance framework.
Air travel analogy
Moving toward an open banking economy is analogous to the
transformation of other verticals both internationally and in Canada.
One illustrative example is the airline industry. Travelers historically
were required to contact incumbent airline companies directly to book
or manage reservations, check availability, check in and check arrival
times. Modern standards in our airline industry have now placed the
customers in control, enabling them to decide what, when, where
14 PAYMENTSBUSINESS
Why open
banking
and how they wished to consume airline services. This amounted to
expanded and improved services for would-be travellers.
The modernization of the travel industry allowed for open
functionality through secure application programming interfaces
(APIs). This re-visioning of the industry enabled customers and third-
party apps to perform most, if not all of the travel functions, without
the need to ever contact the airlines through slow, analogue channels.
It allowed for a proliferation of enhanced functionality and services
which are now accepted and indispensable and which have helped
incumbent businesses to thrive while opening the door to innovation
across the sector, thereby spurring a larger and more vital economy.
Similarly, open standards in banking will bring that vitality to
the financial services marketplace. It will create new and enhanced
functionality and services that will become indispensable parts of
our growing economy.
Open banking benefits
Open banking brings significant benefits to the Canadian market for
customers and businesses. Providing all Canadians agency over their
data also allows them to benefit from the resulting financial access,
efficiency and innovation.
Here is a list of some of the meaningful benefits that the CLA and
our members expect from open banking standards.
1. Greater innovation and competition. Open banking will fuel
and fast track Canada’s FinTech and innovation ecosystem. It will
open the doors for FinTech start-ups to offer customers the ability
to better manage their debt and get sound real-time investment
advice and offers. Open banking will also spark increased
competitiveness between financial institutions and open doors for
new entrants to provide increased financial services and options
to Canadian customers.
2. Improved access and efficiency. Open banking removes a
huge burden off customers by giving them the ability to consent
and choose what data can be shared with whom, thus allowing
for faster and broader access to funds. It will allow customers
March/April 2019

to effectively access third-party financial tools and products
and make it easier for them to pay and get paid. Open banking
opens the door to third party providers to deliver services such
as consolidation of payments (multiple invoices) and of account
statements for treasury and investment purposes. Customers can
give consent and provide instructions to their bank(s) to make
multiple payments on their behalf, share their account balances
with other banks and/or payment providers and save themselves
the inconvenience of logging in to each bank separately.
3. Standardization. Open banking gives customers a consistent
user experience across all banks. Customers can better manage
their financial health through better and broader access to their
financial data; they will be able to see their credit scores in real-
time through their bank accounts, get real-time advice to improve
their scores and better manage their debt. Customers will also
have the ability to change their addresses with all banks and/
or service providers without the need to do so separately with
each institution. Without open banking FinTechs rely on offerings
that might compromise banks’ security, such as bank scrape
technology. Open banking allows for these services to be more
standardized and secure and will give banks the ability to monetize
these services and make them readily available to customers.
4. Serving the underserved. Open banking will make banking
broadly available to the underserved market including women,
new Canadians (immigrants) and indigenous peoples. Lenders
are requiring more and more banking data to understand their
customers’ spending habits and behaviour to be able to provide
funding. Open banking streamlines access to this data and will result
in more access to funds for the underserved customer segment.
5. Customer-first design. Open banking allows customers to
have agency over their data that is critical to develop trust and
accountability and allow the customers to better participate in
essential financial services. With open banking, customers can
access and safely transfer their banking data to trusted parties. It
will provide customers with more control over their data as they
will have more visibility into what data their banks have on them
and can select which parts of that data can be shared and with
whom. Moreover, open banking provides customers more options
to shop and compare products and end up with best products
and rates. Crucially, open banking will result in more educated
and active financial services customers.
6. Commercial benefits. Open banking will allow more small-
midsized businesses (SMBs) to access capital more efficiently than
ever before, which increases economic output. It will increase cash
flow by streamlining access to capital for SMBs and increase the
competitiveness of alternative lending options. At the same time
open banking will decrease the amount of time SMBs dedicate
to business administration, allowing them to spend more time
investing in the success of their operations.
Security and compliance
Open banking relies upon the accessibility and sharing of customers’
data, and thus demands a higher degree of privacy safeguards,
march/April 2019
Open Banking
protection and information security provisions. APIs provide access
to broader sets of data in a simpler and more scalable manner. But
this means that a breach of these APIs could be extremely costly and
could have significant consequences due to the vast amount of data
that could be breached and leaked.
In order for customers to feel safe and protected, there must be
government-mandated standards and framework that all financial
institutions must comply. The rules within these standards should
be comprehensive and cover all risk profiles and tiers by putting the
customers in control of what data can be shared, when and with
whom.
Banks today use their customers transactional data to educate their
fraud detection systems and algorithms. Since open banking allows
customers to perform certain third-party tasks and transactions from
within their banks, those transaction details might not be available
to the banks to analyze. However, it could make it more difficult for
banks to protect customers from fraudulent transactions that are
not within their control.
Open banking also will introduce new types of transactions that
incumbent banks are not necessarily familiar and might require time
to adopt proper security to manage. A period of transaction history
may be required to build appropriate fraud detection tools and
algorithms.
In order to make open banking operate effectively and efficiently
in Canada, unlocking its full potential and value for the customer,
we believe that standardization and compliance is crucial. The
Personal Information Protection and Electronic Documents Act
(PIPEDA) already provides a robust framework for the privacy and
protection of customer data. PIPEDA can be enhanced to make it
more comprehensive by including open banking standards.
Crucial government role
The federal government must play a leadership role in bringing open
banking to Canada. Any open banking initiative necessitates that all
stakeholders in the financial sector participate in it.
First, it is essential that the government mandate standards and
enforce them in order to create a unified vision of open banking
that all stakeholders in the industry can comply. It should establish
and advance them by working horizontally with incumbent and
alternative sector stakeholders.
Second, the government should evolve the customer-first data
policy, thereby ensuring the protection of customer data by placing
the customer in control of their own data.
Finally, the government should work across ministries, benefiting
from standards in privacy and consent investigated by the Treasury
Board’s Digital ID initiative.
Gary Schwartz is author of the award-winning books “Impulse Economy” and “Fast
Shopper, Slow Store.” Gary is president of the Canadian Lenders Association (CLA).
The CLA (www.canadianlenders.org) represents and promotes services and innovation
in the Canadian lending sector. The CLA’s lending members provide credit to both the
SMB and consumer markets.
PAYMENTSBUSINESS 15
 Points
& Rewards
Evolving Canada’s
iconic loyalty
programme
By Susan O’Brien
L
oyalty programmes are an important part of the toolkit for
many retailers. Yet few of them have the legacy and reputation
of Canadian Tire Money®, Canada’s first loyalty programme.
Canadian Tire Money or CTM is a Canadian icon. With more than
12 million members nationwide and over $1 billion of the currency
issued since its debut in 1958, Canadian Tire Money has long
been considered Canada’s second currency. It is so deeply rooted
in Canadian heritage that it is even included in the Oxford English
Dictionary.
Canadian Tire Money has been evolving since its introduction.
This includes the integration of CTM into the Canadian Tire Options
Mastercard in 2000 and the 2014 launch of the My Canadian Tire
“Money” programme, which introduced electronic CTM to cash, debit
and third-party credit customers at Canadian Tire Retail (“CTR”).
Canadian Tire Money to Triangle
In April 2018, Canadian Tire Corporation (CTC) announced the most
significant evolution yet with the launch of Triangle Rewards™ the
foundation for CTC’s future growth. The main objective was simple:
to create the easiest and most rewarding loyalty and credit card
programme in the country. But evolving Canada’s oldest loyalty
16 PAYMENTSBUSINESS
programme was no small feat and it required insights from our retail
banners, dealers and of course, our customers.
Canadian Tire Financial Services and our retail banners spent almost
a year building Triangle Rewards™. The result was a no fee loyalty
and credit card programme that makes life easier for our customers
by providing features and benefits designed for life in Canada.
The main objective was simple:
to create the easiest and most
rewarding loyalty and credit card
programme in the country.
Triangle Rewards allows customers to collect Canadian Tire Money
faster, redeem their earnings at more places and receive personalized
offers. With the ability to earn and spend CTM across banners,
Triangle Rewards also has the added benefit of uniting them as one
company in the eyes of our customers.
Today, customers can collect and redeem electronic CTM at
Canadian Tire, SportChek, Mark’s and Atmosphere locations, and
March/April 2019
 points
& rewards

on fuel purchases at Canadian Tire Gas+ and participating

Husky stations. In all, it enables members to collect CTM online
and in-store at more than 1,300 locations and to redeem it at
more than 1,000 outlets.
As part of the Triangle Rewards programme, Canadian Tire
Bank offers a premium, no-annual-fee Triangle World Elite
Mastercard, which gives holders the benefit of collecting CTM
on purchases and redeem special offers. This new, younger and
more inspired Triangle Mastercard programme is designed to
attract a new customer to Canadian Tire Financial Services and
to engage and reward Canadians in an innovative way.

Enabling personalization
To make Triangle Rewards the best loyalty programme in Canada
it was crucial for us to give more control back to customers,
offering more choices on how they can collect and redeem
their money and to create personalized offers. Following the
launch of Triangle Rewards, we introduced Triangle.com and
the Triangle™ App which delivers personalized weekly offers
and relevant content to members on an ongoing basis. Using
the Triangle App, members can view their offers in one place,
manage their loyalty accounts and credit cards from anywhere,
track credit card and loyalty transactions simultaneously and
activate new offers. Additional perks include exclusive shopping
events for Triangle Rewards members and credit cardholders.
Whether its through the Triangle App or e-mail, we regularly
notify members of upcoming sales and events so they can
redeem their rewards often and collect even more Canadian
Tire Money. To make participation easier, there are also more
than 23,000 associates across participating retailers in-store
and online ready to help Triangle members get the most out of
their everyday shopping.
With millions of members from coast to
coast, the Triangle Rewards programme

Photos Courtesy Canadian Tire Corportation

provides us with unique insights into
Canadian consumers and it is

Susan O’Brien is senior vice president, marketing,

for Canadian Tire Corporation, Limited (CTC).

Canadian Tire Money or CTM is arguably recognized as distinctly Canadian as Canada’s

paper and coin currency. Since its inception in 1958, CTM has been evolving to include
loyalty cards and mobile to provide a greater customer experience.

march/April 2019 PAYMENTSBUSINESS 17

 Points
& Rewards

The success of loyalty programmes lies in delivering a clearly understood value

proposition combined with ease of redemption. Canadian Tire Corporation has
been providing just that for over 60 years, and now across multiple channels.

Photos Courtesy Canadian Tire Corportation

adaptable to their shopping habits to stay relevant over time. Using
the programme’s customer data, we are able to identify ways to
improve the programme’s offerings and opportunities to add even
more value. In October 2018, we partnered with Husky Energy and
expanded the programme to give consumers the ability to earn
more Canadian Tire Money on fuel purchases. We are also currently
exploring ways to expand the programme to other businesses.

Customer response
Triangle Rewards signalled that we are committed to creating a
Triangle Marketplace to deliver the best of what CTC has to offer
throughout our customers’ lifetimes and that message is resonating
with Canadians. Since its launch, Triangle Rewards has had an
overwhelming response and awareness of the credit card and
loyalty programme has grown. We’ve seen a substantial increase in
loyalty issuance and redemption and double-digit increase in active
members and spend per customer.
From humble beginnings as Canada’s first loyalty programme,
Triangle Rewards is the underpinning of our organization’s future
and a key driver to our continued success. CTC is on a journey to
become the number one retail brand in Canada by 2022. As a unique
touchpoint with Canadians, Triangle Rewards will play an important
role in getting us there, serving as an incredible growth engine that
enables us to seamlessly engage customers, deliver great offers and
create new experiences for years to come.
Susan O’Brien is senior vice president, marketing, for Canadian Tire Corporation,
Limited (CTC), and is responsible for all marketing and branding strategies for
Canadian Tire Retail, Mark’s, SportChek and Canadian Tire Financial Services. Known
for her 360-degree view of campaigns, Susan is an expert in brand reinvention and
positioning. Since joining CTC in 2008, Susan has held a number of progressively
senior roles. Most recently she served as senior vice president, marketing and
corporate affairs. Prior to that she was vice president of marketing. In this role, Susan
was responsible for the development and execution of marketing and branding
strategies for Canadian Tire Retail.

18 PAYMENTSBUSINESS March/April 2019


A rewarding card strategy
By Allen Pettis
C
anadians love their credit cards. In TSYS’s most
recent Canadian Consumer Payment Study,
consumers ranked credit cards as their number
one favourite payment method for the fourth year in a row. And for
the first time since the study began, Canadians across age groups
and income levels said they prefer paying for purchases with them.
These findings are good news for credit card issuers and the
strength of their products. But the same study also has potentially
cautionary findings for the industry. For the fifth year in a row, loyalty
or rewards programmes came in as the top factor driving consumers
to select particular credit cards, with 90 per cent of respondents
selecting rewards as a feature that causes them to use one credit
card over another.
This data suggests that consumers aren’t necessarily committed
to credit cards. Instead they’re committed to rewards. And the
companies that offer the most attractive rewards programmes are
best positioned to take market share from competitors: even if they
are not traditional credit card issuers.
Digital wallets, merchant apps competition
Enter digital wallets and merchant apps, which represent growing
forms of competition for issuers. Amazon, for example, has a credit
card that seamlessly integrates with its e-commerce platform,
allowing customers to apply points they earn toward purchases
(Alipay has the same type of programme). Venmo recently introduced
a debit card, positioning it to launch a loyalty programme in the
future, although it has not done so yet.
Scores of other merchants have rewards programmes that
encourage customers to pay for purchases within mobile apps. For
example, Starbucks customers earn rewards by ordering through its
app, which can be set to automatically reload a customer’s prepaid
card once the balance falls below a certain level.
The threat that each of these companies pose to traditional credit
card issuers, notably the larger banks and credit unions, and risking
eroding their market positions, is that customers could take more of
their business to other companies with whom they have relationships,
such as Amazon and Venmo. Even when these issuers provide the
infrastructure for the cards—as is the case with the Amazon credit
card, which is issued by Chase—customers are being trained to view
e-commerce retailers and other non-bank entities as viable financial
partners. Long-term, this could exert new competitive pressures on
the banks and credit unions.
Bank, credit union advantages
Bank (or credit union) credit card issuers still have major advantages
over non-traditional competitors. In most cases, banks and credit
unions offer a broader range of rewards programmes. A retailer
march/April 2019
points
& rewards
that encourages customers to link a store card directly to their
checking account, for example, might reward those customers
with cash back, discounts at the register or points that could be
used for future purchases. However, the benefits are typically limited
to the products sold by that retailer. In contrast, banks and credit
unions can offer various products that appeal to clients’ specific
areas of interest, such as travel, restaurants, entertainment, groceries
or cash back.
Banks and credit unions know more about an individual’s broader
spending habits than any single merchant. They should leverage this
information to target customers with rewards programmes that are
most likely to appeal to them.
Finding new ways of segmenting customers and understanding
their purchase patterns will enable banks and credit unions to
develop new and creative rewards programmes. They can play
leadership roles in curating new experiences for customers based on
in-depth knowledge of their interests.
Learn from the retailers and innovators
The innovation that’s currently happening in the loyalty and rewards
space is focused on making the process of redeeming rewards easier
and faster. The push toward the seamless customer experience is
driven by companies such as Amazon, Apple and PayPal that have
excelled at simplifying various tasks, from buying music to ordering
things online or paying a friend. Consumers now expect their
payment card(s) to deliver the same kind of experience.
The frictionless rewards experience has already gained relatively
widespread adoption. Most anyone with a mobile banking
application has seen special offers from various merchants appear
at the bottom of their screen. All they need to do is accept the offer
within the app and the discount is applied whenever the purchase is
made. FinTech players across the industry are working to bring this
same type of immediate redemption opportunity to other types of
transactions.
Embracing the innovator role
The banking industry, along with credit unions are well-positioned
to invest in loyalty programmes that provide new ways of giving
consumers the instant gratification they desire instead of waiting
for retailers and other technology startups to bring these types of
solutions to market. Banks and credit unions can and should play a
leadership role in this space because nobody understands consumer
purchase patterns better than them. And in today’s data-driven
world, the companies that understand the consumer are in a much
stronger position to win them over.
Allen Pettis is executive vice president and chief customer officer of Issuer Solutions at
TSYS (www.tsys.com), responsible for all global account management and sales.
PAYMENTSBUSINESS 19
 Industry news
2019 CPPO Prepaid Symposium May 13
Prepaid cards play an increasingly vital role
in Canada’s payments system. The Canadian
Prepaid Providers Organization (CPPO) is
offering an opportunity to learn more about it
at the third annual CPPO Prepaid Symposium
on May 13, 2019 at the Toronto Region Board
of Trade in Toronto, Ont. The one-day event
precedes the Payments Canada Summit,
which is being held May 14-16, 2019 also in
Toronto.
The CPPO has been bolstered recently
by five new members. Galileo, Netspend,
Spring Card Systems and Vancity Community
Investment Bank have joined as general
members and Stack has been welcomed as a
board member.
“As the prepaid market continues to evolve,
this year’s Symposium will focus on prepaid as
a driver of financial inclusion and innovation
and a core capability in Canada’s PayTech
growth,” said Peter Read, CPPO chairman of
the board. “A wide range of the industry’s
local and international thought leaders will
present actionable insights around payment
technology and trends for consumer and
business applications.”
The Symposium will kick off with a keynote
address from Jim Marous, co-publisher of The
Mastercard debuts sonic brand
Setting a new tempo for brand expression,
Mastercard has debuted its sonic brand
identity, a comprehensive sound architecture
that signifies the latest advancement for the
brand. Wherever consumers engage with
Mastercard across the globe the distinct and
memorable Mastercard melody will provide
simple and a seamless familiarity. It will extend
to many assets, from musical scores, sound
logos and ringtones to on-hold music and
point of sale (POS) acceptance sounds.
The news comes on the heels of Mastercard’s
recent transition to a symbol brand and is part
of its continued brand transformation. Sound,
it said, reaches people through another sense.
Therefore, having a unique sonic identity is
critical to Mastercard’s distinctiveness.
20 PAYMENTSBUSINESS
Financial Brand and owner and publisher of the
Digital Banking Report. The Symposium will
also feature a keynote presentation by Kelley
Knutson, president of Netspend, and more
than ten panel discussions, presentations and
workshops by leading industry voices about
the evolution of prepaid and the broader
payments ecosystem.
Symposium topics include:
• How to compete in loyalty programmes;
• AI-based digital identity/authentication
solutions;
• The real-time rail: threat or opportunity for
prepaid?
• Merging banking and payments with
securities and investing; and
• Federal regulations and their impact on
payments.
Among the other speakers are:
• Daniel Eberhard, co-founder and CEO,
Koho;
• Scott Harkey, global payments lead,
Levvel;
• Yves-Gabriel Leboeuf, CEO, Flinks;
• Gabriel Ngo, advisor, financial crimes
policy, Department of Finance Canada;
• Felipe Papaleo, general manager, Incomm;
“Sound adds a powerful new dimension to
our brand identity and a critical component
to how people recognize Mastercard today
and in the future,” said Raja Rajamannar,
chief marketing and communications officer,
Mastercard. “We set out an ambitious goal to
produce the Mastercard melody in a way that’s
distinct and authentic, yet adaptable globally
and across genres. It is important that our
sonic brand not only reinforces our presence,
but also resonates seamlessly around the
world.”
With voice shopping set to hit $40 billion
by 20221, audio identities not only connect
brands with consumers on a new dimension,
they are tools enabling consumers to shop,
live and pay in an increasingly digital and
March/April 2019
• Miro Pavletic, CEO, Stack;
• Charumitra Pujari, vice president of
machine learning, Paytm Labs;
• Jacqueline Shinfield, partner, Blake, Cassels
& Graydon LLP;
• Sue Whitney, head, product management
and strategy, Payments Canada; and
• Clay Wilkes, founder and CEO, Galileo
Processing.
The corporate sponsors of the 2019 CPPO
Prepaid Symposium include: Blake, Cassels &
Graydon LLP, Galileo, Incomm, Mastercard,
Pace, Peoples Card Services, Payment Source,
The Fletcher Group and Ubiquity Global
Services.
“Attendees from the 2017 and 2018
Symposium expressed great enthusiasm
for the content and speakers,” said CPPO
co-founder and executive director Jennifer
Tramontana. “So we have expanded those
offerings this year with a deep dive into new
applications and case studies from proven
programs and leaders.”
For more information and to register
for the CPPO Prepaid Symposium visit
https://cppo.ca/prepaid-symposium.
mobile world.
“Audio makes people feel things, and
that’s what makes it such a powerful medium
for brands,” said Matt Lieber, co-founder
and president, Gimlet. “With the explosion
of podcasts, music streaming and smart
speakers, an audio strategy is no longer a
“nice-to-have” for brands, it’s a necessity. A
sonic identity—the audio calling card for a
brand—is now just as important as a brand’s
visual identity.”
To ensure the Mastercard melody would
resonate with people the world over,
Mastercard tapped musicians, artists and
agencies from across the globe, including
musical innovator Mike Shinoda of Linkin
Park.
 2019 Industry
Events

The result, a distinct and memorable melody with

April May 7-10
adaptations across genres and cultures, making it locally
FinovateSpring 2019
relevant while maintaining a consistent global brand voice. In April 3-4 San Francisco, Calif.
The National Crowdfunding https://finance.knect365.com/
addition, the use of varying instruments and tempos help to
and Fintech Association finovatespring/
deliver the Mastercard melody in several unique styles such as FFCON19
operatic, cinematic and playful as well as a number of regional Toronto, Ont. May 13
https://ncfacanada.org/ Canadian Prepaid Providers
interpretations.
Organization Third Annual
“What I love most about the Mastercard melody is just how April 15-17 Prepaid Symposium
flexible and adaptable it is across genres and cultures,” said Framework Venture Partners Toronto, Ont.
and BDC www.cppo.ca/prepaid-
Shinoda. “It’s great to see a big brand expressing themselves
Canadian FinTech 3.0 Summit symposium
through music to strengthen their connection with people.” 2019
Toronto, Ont. May 14-16
1 Sarah Perez, “Voice shopping estimated to hit 40 billion across U.S. and U.K by https://fintechsummit.ca/
2022”, news. TechCrunch, March 2, 2018. Payments Canada
2019 Payments Summit
April 15-18 Toronto, Ont.
NAPCP Commercial Card https://www.thesummit.ca/
and Payment Conference
Whitepages Pro introduces Miami, Fla.
www.napcp.org/page/confabout
May 16-17
DigiMarCon Canada
Transaction Risk API April 24-25
Toronto, Ont.
https://digimarconcanada.ca/
Central1 2019 Member Forum
Whitepages Pro has introduced the Transaction Risk API to fight and AGM May 21-23
payment fraud and improve the efficiency of authorizations early Vancouver, B.C. Reed Expositions
www.central1.com CNP Expo & Conference
in the transaction flow. The predictive identity data features
San Francisco, Calif.
included in Transaction Risk API are leveraged in models, April 30-May 2 www.cnpexpo.com
alongside internal company data, to provide an additional layer TRANSACT powered by ETA
Electronic Transactions May 28-29
of identity verification for real-time risk reduction at scale.
Association Retail Council of Canada
In under 100 milliseconds, the core identity data elements Las Vegas, Nev. STORE 2019
of e-mail, IP, phone, address and name are scored to return www.electran.org/events/ Toronto, Ont.
etatransact/ www.storeconference.ca
a concise response, easily consumed by risk models at high
volumes. The low latency of Transaction Risk API allows for May June
global identity verification during the authorization process,
May 5-8 June 4-6
helping companies to reduce false declines while finding
Canadian Credit Union Canadian Venture Capital
previously undetected fraud. Association 2019 National & Private Equity Association
And, according to the company, initial data test results for Conference for Canada’s Invest Canada ‘19
Credit Unions Vancouver, B.C.
early adopters have exceeded its expectations in terms of both
Winnipeg, Man. www.cvca.ca/event/invest-
ease of testing and integration but more importantly, providing https://ccua.com/events/ canada-19/
significant improvement in model performance. national_conference/2019
“To prevent fraud and identify good customers early in the June 5-7
May 5-8 FEI Canada
transaction flow, businesses have historically relied on their NACHA 2019 Annual Conference
internal data and signals,” said Whitepages Pro senior director Payments 2019 Blue Mountain, Ont.
Orlando, Fla. https://feicanadaconference.ca/
of product management Ajay Andrews. But as they move more
https://payments.nacha.org/
commerce and services online, these businesses face both an
June 12-13
order of magnitude increase in transactions and a compressed May 7-9 Big Data and AI Toronto 2019
WB Research Toronto, Ont.
time window to make decisions. Transaction Risk API addresses
eTail Canada www.bigdata-toronto.com/2019
these needs by leveraging technical innovation and machine Toronto, Ont.
learning to deliver a suite of our most predictive attributes.” https://etailcanada.wbresearch.com/

To send press announcements, Visit us online

please direct them to
Brendan Read, Editor,
www.paymentsbusiness.ca
at brendan@paymentsbusiness.ca

March/April 2019 PAYMENTSBUSINESS 21

 payments
Modernization
Securing payments
in a connected world
By Gord Jamieson
T
he world is becoming
hyperconnected with
the rise in the number
of smart devices. This is driven in part by
the growing comfort and habit among
consumers with making purchases on their
phones, tablets, computers and Internet
of Things (IoT) devices. In fact, industry
analysts predict there could be more than
21 billion connected devices on the edge of
the Visa network by 20201.
This hyper-connectivity is creating new
ways to pay, such as wearable gloves for
athletes to pay at the Olympics or the
connected cars that pay at the pump. The
trend is speeding towards an interconnected
shopping experience. And Canadians are
embracing a connected life. Let’s look at a
trip to Vancouver. You can make an airline
and hotel reservation through your virtual
assistant, take an Uber ride to the airport,
order a coffee there through an app for pick
up, and when you arrive you tap your credit
card to pay for a fast ride on the Canada
Line rapid transit.
Moreover, Payments Canada is developing
a modern payments system that will provide
new opportunities to simplify and enhance
Canadians’ daily payment interactions
and help secure and strengthen Canada’s
competitive position as a global leader in
financial services. Through its Modernization
initiative a modern payments infrastructure,
designed for tomorrow’s digital world, will
introduce new opportunities to simplify and
enhance everyday payment interactions,
securely and safely.
Need for confidence and security
With this transition there is a need to
keep the payments networks secure and
consumer confidence high. This means
we need to take a deep look at the rise of
the card-not-present (CNP) channel, which
22 PAYMENTSBUSINESS
represents transactions that occur when
the cards are physically not presented to
the merchants and are usually conducted
virtually.
The biggest challenge in the CNP channel
is authentication. In the card-present (CP)
space, it’s simple: a chip card presented at
the terminal is authenticated by a unique
cryptogram and the cardholder entering a
PIN. But in the virtual world, the merchant is
not face-to-face with the consumer, thereby
removing the option for a cardholder to
enter a PIN and creating the need for other
ways to authenticate the individual making
the purchase.
New methods and solutions
The payment industry is way ahead of
this trend. It will soon be introducing new
advanced risk-based decision-making for
e-commerce to authenticate purchases in
the CNP space by using updated standards
from EMV® 3D-Secure. It will enable
financial institutions to better assess whether
transactions are legitimate or fraudulent.
It accomplishes this by examining ten
times more risk factors than before, such
as browser and device types, location of
transactions and the security of merchants’
point of sale (POS) devices to help decide
whether step-up authentications are
required.
Digital tokens are another powerful
tool to secure digital payments. It replaces
the transmission of actual payment card
numbers so if a POS system, mobile device,
mobile application or network connection
is compromised, payment card numbers are
safe since they are not exposed.
The Visa Token Service recently expanded
its partnership with Netflix and it added
20 new partners bringing the total to 60
partners around the world. The expansion
means that Visa-accepting merchants
will no longer have to store sensitive
March/April 2019
data, like primary account numbers, thus
greatly reducing risk for people who store
their card information on mobile devices,
mobile apps or online with e-commerce
merchants. Instead, merchants will now
be able to mask their customers’ primary
account numbers with tokens, which are
protected by restrictions that render them
useless to fraudsters if they were ever to be
compromised.
In addition, Canadian companies that
facilitate digital payments will likely layer
3DS 2.0 with other advanced analytics
technologies like artificial intelligence
(AI), similar to what Visa is doing. Visa
uses AI technology, called Visa Advanced
Authorization, to analyze up to 500 unique
risk attributes in a millisecond, searching for
fraud the moment a payment is initiated.
The AI algorithm assesses these attributes
to produce a score of the transaction’s
predicted fraud probability and relays the
score to the cardholder’s financial institution
for them to decide to either approve or
decline the transaction. This process is
repeated up to 32,500 times per second,
with Visa’s AI analyzing more than six billion
pieces of data every day.
Canada, through the efforts of Payments
Canada and its Modernization initiative,
is leading the way for securing modern
payment methods. As CNP commerce
becomes more commonplace, it will be
important to tackle fraud using all the
best tools that will enable the consumer
and merchants to feel safe with each
transaction. At Visa we continue to invest
in new technologies to stay ahead of where
Canadians’ purchasing trends are going to
ensure each is transaction secure.
Gord Jamieson is head of Visa Canada risk services.
1 Gartner, “Gartner Says 8.4 Billion Connected ‘Things’
Will Be in Use in 2017, Up 31 Percent From 2016”, press
release, February 7, 2017.
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