Canada has long served as a leader in cashless payments. With the COVID-19 pandemic raging on, the nation has pressed forward to even greater, faster innovation. Investments currently being made are leading Canada toward new payment options that will help your business be more effective wherever you are—so long as you are ready for it.
ISO20022
Canada is working to not only move into a greater level of electronic payment processing for itself but to do so on an international basis. A key aspect of this is the ISO20022 messaging standard, an international standard designed to simplify global financial communication which will modernize payments systems, including Canada’s.
Before you can be ready to adopt the new advances in Canadian payments, you need to be able to function within this standard. All of the new platforms will require it, or a bridge to it from your current system. You need not only be able to message in the proper format but prepare for surging volumes of enhanced data within it. Your processing partner should be well versed and ready to help you adapt.
Lynx System
Lynx is a payment system set to go live with Payments Canada in 2021. Its primary innovation in phase 1 is shifting credit risk from the central bank to all of the system participants. Your processing partner will need to have full collateral and backstop in place for all transactions, enforcing the strength of the system and allowing for faster processing.
In addition, you will need ISO20022 capabilities to run payments through the system. If your payments partner is not ready to run with this system, you will be behind your competitors when phase 2 kicks in to enable faster, more efficient wire transfers and electronic payments.
Real-Time Rail
All of this leads to Real-Time Rail (RTR), a process of data-rich, high-speed transaction processing. The infrastructure of this system will allow you to access payments with lower fees, international collaborations, and near-instant processing for payments coming from anywhere in the world. Beyond making payments faster, RTR will allow for greater enablement of social media and QR code payments and foster increased innovation in these areas. Canadian payment capabilities continue to evolve with the worldwide capabilities in place. Work with payment partners who can leverage this infrastructure to get the most for your business.
Choose Your Partners Wisely
This all represents the overall nature of the payment processing industry: A fast-changing regulatory and technological arena in which the prepared and the nimble find the most success. For you to get the most out of Canada’s leap forward, you need more than just a sound business structure.
Working with the right payments partner can keep you at the front edge of the payment innovation curve—in Canada, and anywhere else you or your customers do business. Make sure your processing partner has the tools in place to help you succeed.
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Shaun McDonald is Nuvei’s VP Product. With Nuvei since its inception, Shaun has 20 years of end-to-end experience in payments with a focus on fintech product and project management, reporting and analytics. With extensive technical knowledge and payment industry expertise in both the US & Canada, Shaun’s insights and team management have been invaluable to providing Nuvei’s clients maximum product lifecycle value.
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