Bank of Canada designates Interac e‑Transfer as a prominent payment system
BANK OF CANADA Governor Tiff Macklem has designated Interac e‑Transfer as a prominent payment system under the Payment Clearing and Settlement Act, effective August 10, 2020.
This brings Bank oversight to this payment system and ensures it remains a safe, viable and effective method of payment for Canadians.
The Bank regularly monitors the evolution of new and existing payment systems to determine whether they warrant oversight because of their potential to cause systemic or payment system risk. Designating Interac e‑Transfer as a prominent payment system means it must adhere to the Bank’s risk management standards, including having risk controls in place to ensure continued resilience.
Interac e‑Transfer has become central to the Canadian payments system. In the 2019 fiscal year, the Interac system facilitated over 486 million transactions, totalling $169 billion. A disruption or failure of the Interac e‑Transfer system could cause a significant adverse effect on economic activity in Canada, potentially leading to a general loss of confidence in the overall Canadian payments system.
E-transfers have become increasingly popular among small businesses and “a really important building block of Canada’s payment system,” said Dan Kelly, the head of the Canadian Federation of Independent Business and a member of the federal FinPay Committee, which advises the government on payment-related issues.
A survey conducted by CFIB in July found 38 per cent of small business owners had decreased their use of cash since the pandemic began, and one in three said they had increased their use of credit cards and e-transfers. E-transfers can allow businesses to move blocks of money around at a low cost, and can provide a cheaper alternative to credit cards, Kelly said.