“Hold on, I think I’ve got another penny in one of these pockets…”
It was only a couple of decades ago where paying with paper (not even polymer!) and metal coinage was the go-to. A common alternative, hardly touched today outside of legacy business, was the classic cheque. Cash registers for point-of-sale transactions were hefty, clunky blocks. Only fancy business folk had credit cards and even then used them sparingly.
Now we use digitized cards and pay by tapping a POS terminal—which could be an iPhone these days—with our smartphone or even smartwatch. Cash is increasingly rare, even vilified since the Covid-19 Pandemic, while Bitcoin and other cryptocurrencies continue to gain mainstream adoption in Canada and elsewhere.
Three-quarters of Canadians have used at least one emerging payment method in the last year, which includes cryptocurrency, digital cards, and “Buy Now, Pay Later” services. According to Mastercard’s New Payments Index, this figure is projected to rise to 88% next year.
“Research from Mastercard shows that the adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continue to grow at an aggressive rate,” Darrell MacMullin, Senior Vice President, Product, Digital and New Payments at Mastercard in Canada, stated in July.
Payments seems like a simple thing at first, but it’s easy for the consumer to take such a process for granted. We have come a long way from searching pockets for pennies in a short time period. From today’s online payments to instant touch-free payments between mobile devices and everything else, Canadian fintechs are innovating the scene so that transacting is as smooth and effortless as possible for customer and business alike.
Calgary’s Helcim raised a $16 million Series A funding round led by Toronto’s Information Venture Partners and New York’s Aquiline Technology Growth in March.
The company is on a mission to be “the world’s most loved payments company” by giving small businesses every possible edge to thrive and enrich communities. The funding will be used to launch new products that make it easier for businesses to get paid and adopt the latest payment technology that they want, Helcim said.
“We built Helcim to provide the payment tools that allow small businesses to thrive by combining our payments-first approach, accessible and easy to use software, alongside our knowledgeable and helpful customer service,” stated Nic Beique, Helcim CEO and Founder.
Helcim relaunched as a payments facilitator in June of 2020. The company was named as one of Canada’s Most Admired Corporate Cultures in 2021.
Dello wants to change the dynamic of buying goods and services with cryptocurrency. The Montreal-based fintech startup believes that, currently, sending and receiving cryptocurrency payments in consumer sale situations is unnecessarily complicated.
Cryptocurrency’s high-transaction fees “can make purchases for low-priced items difficult, or the slow and inconvenient process of converting cryptocurrency can have costly exchange fees,” the Canadian company notes. These hurdles “are why many sellers and buyers have avoided crypto for consumer transactions.”
Dello launched a payment processing solutions for cryptocurrency users which it says makes it easy to handle transactions—whether it be for small everyday purchases or large-ticket items like motor vehicles and real estate.
Dello notes this “nearly instant” process lets buyers completely avoid traditional banking. It has been developing its point-of-sale technology for crypto and conventional digital payments since 2021 before rolling out its sales platform to interested merchants.
Canada wants to modernize its payments infrastructure. To achieve this, salient organizations are collaborating to develop the Real-Time Rail. The RTR is described by Interac as “a national payments system that will enable fast, data-rich payments—giving governments and businesses of all sizes the ability to move meaningful sums of money instantly and with certainty.”
The effort requires moves from the tech and the policy sides. “There’s a public policy objective here to make payments faster, more seamless, more efficient,” stated Kirkland Morris, Vice President of Enterprise Initiatives and External Affairs at Interac Corp.
To help build the RTR, Interac is working with Payments Canada, an organization which “underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure,” including associated systems, by-laws, and standards.
“Modernization is going to strengthen Canada’s competitive position, in particular through faster payments,” said Janet Lalonde, Senior Director of Real-Time Rail at Payments Canada. Lalonde says the move toward faster payments is a “global trend.”
“These improvements are … going to facilitate innovation and competition and promote a stronger Canadian economy,” she noted. Morris adds that, on top of instant speed, there is also a “data richness that comes with RTR payments” which will allow larger businesses to shed lingering legacy systems like paper invoicing and cheques.
The Real-Time Rail is expected to launch in 2023.
Payments platform Mash announced in June a $6 million seed funding round co-led by Castle Island Ventures and Whitecap Venture Partners.
The Toronto-born startup aims to remonetize the internet by enabling builders, creators, and developers to implement new business models to generate revenue for the experiences they deliver—and by extension providing consumers with a digitally native wallet to use everywhere. Basically, Mash doesn’t want independent creators and innovative tech to rely on lame revenue streams like poorly paying advertisements and consumer-hostile subscription models.
Mash leverages Bitcoin’s Lightning Network. The startup was founded in 2021 and since then has established “a world-class engineering and design team with top tier startup and big tech experience” at companies such as Google, Amazon, and Fitbit.
“With the maturation of Bitcoin and the Lightning Network, the timing has never been better to commercialize the concept of dynamic digital payments,” said Russell Samuels, Partner at Whitecap Venture Partners. “With tens of millions of developers globally, and hundreds of thousands of new apps launching each year, the potential for Mash is significant.”
Ottawa’s storied staple Shopify has done plenty for payments, such as by launching its own personal features like Shop Pay. They have also worked on offline solutions, like their QR code functionality. It has long been in the company’s best interest to support and innovate payments, as this provides a benefit to both the merchants who run digital stores and the customers who fund them.
Shopify has more recently enabled payments in the cryptocurrency space, signalling the company aims to stay ahead of the curve on payment innovation in Canada. The tech firm’s announcement of token-gated commerce offers a whole new angle of payment transactions.
London, Ontario’s Paystone acquired Canadian Payment Services in January. With the acquisition of CPS, Paystone now services 35,000 locations across Canada and the United States which collectively process over 10 billion dollars a year in bankcard volume.
“This is the largest acquisition we’ve made to date in relation to both new revenue and clients,” explains Tarique Al-Ansari, CEO at Paystone. “Additionally, we’re also excited to provide additional value to CPS merchants through Paystone’s proprietary product and service offerings.”
The acquisition was the sixth addition to Paystone’s burgeoning portfolio of acquisitions, having acquired five other businesses in the past two years including Montreal’s DataCandy and Vancouver’s NiceJob.
Instant payments continue to gain traction in Canada, and with Payments Canada’s real-time rail set to launch in 2023, the real-time payments market is expected to flourish.
Vancouver’s VoPay has a strategic partnership with Europe’s HES FinTech to enable Canadian lenders to access smarter loan technology and real-time bank account payments using a single solution, helping lenders scale up while outperforming competitors in the growing lending market.
“The Canadian lending landscape is going through a major transformation, from how loan applications are submitted digitally to how fast payments are distributed, lenders are looking for ways to stay ahead of the curve,” stated Hamed Arbabi, CEO and Founder of VoPay, in April.
VoPay’s payment technology is integrated with the HES loan management solution, enabling lenders to access real-time payment capabilities, including instant funding of loans, simplifying the loan process.