Interac e-Transfer® has become a remarkably successful and useful product for Canadians. According to projections, in 2016, the platform will be used 150 million times and will transfer $62 billion in value. It’s not just individuals capturing the benefits of faster payments through Interac e-Transfer. Last year, payments were also sent from individuals to businesses, from businesses to individuals, and from businesses to other businesses.
All of this business activity has taken place on a platform that started out as a product designed for retail banking customers, and it’s been clear to us for some time that additional business-focused payment services would widen the range of the platform’s possible uses. A new generation of such business services will be coming next year.
In the meantime, however, it’s important to recognize that Interac e-Transfer is a platform with business benefits that can, and should, be captured today. Businesses and other organizations spend enormous amounts of money and time processing paper-based payments. To collect money from customers, a business prints, folds, seals, and mails thousands (or hundreds of thousands) of paper invoices every month, and then as payments come in, the business opens, sorts, and processes thousands (or hundreds of thousands) of paper cheques. What’s more, while the business is waiting for all of this to happen – a time span that also includes mail transit time (both ways) and cheque clearing delays – there is no money going into its accounts. Managing through these traditional time lags, month after month, requires close attention to cash flow and often significant amounts of credit or working capital, neither of which is free.
For financial institutions with valuable portfolios of small and medium-sized businesses who want to start helping their clients transition to a future of fast paperless payments, Interac e-Transfer already has the capabilities they need to capture much of the value on the table:
- Making payments: Businesses and organizations are using the service on a bulk basis to transfer tax refunds to their clients, for example, or to disburse relief funds to families affected by a disaster. This functionality will be extended to accommodate for large value payments, enabling businesses to directly pay other businesses while providing all the remittance information required to easily reconcile the payments made.
- Collecting payments: Customers can use the service to pay invoices without mail or clearing delays
,and businesses will soon be able to use it to invoice their customers easily and cheaply.
All of this potential is enabled by the powerful features the platform offers, including a national directory lookup, real time payment status notifications, real time funds availability, straight-through processing of payments, analytics and fraud services (our platform tracks fraud at industry-leading performance rates), and real time reporting.
We’re excited about the new, business-focused features to be offered by the Interac e-Transfer platform next year, but that’s no reason to delay giving your clients the most creative and useful electronics payments experience that your teams can conceive and code. Small and medium-sized businesses are an innovative part of our economy and are looking for digital solutions to help them succeed and compete. The financial institution that offers cutting-edge SMB services built on top of our payment rails will no doubt benefit in growing this segment of their business portfolio.
