Visa is making sure that the days of paper cheques are numbered in Canada by expanding its Visa Direct push payments platform north of the border.
Visa says its real-time service to send and receive money is already available in 200 markets around the world. Built on top of its same payment network that enables debit and credit card transactions around the world, the service allows for payments to be made directly to a bank account. It’s an ideal way to replace many business processes that currently rely on cheques, seeing as its a much quicker method for payment and there’s no risk of it getting lost in the mail.
“We expect this to be a significant thing for payments in Canada in general,” says Brian Weiner, vice-president and head of product at Visa Canada. “With the existence of Visa debit in the market, it effectively acts as the proxy to the bank account.”
Visa Direct has allowed for person-to-person payments in Canada since 2013. Now it’s working with two new partners in Peoples Payment Solutions and Telus Health and Payment Solutions. The former will be using Visa’s permissioned APIs to offer services to its business clients that enable them to send real-time payments to Visa debit cards in Canada. The latter will be making use of Peoples Payment Solutions in order to pay its customers for their benefits claims.
On launch day, 93 per cent of Visa debit cards in the Canadian market will be able to receive push payments, Weiner says. “We don’t have every single bank on day one supporting it.”
Visa Direct faces competition in the market from Mastercard Send. At the end of February, Mastercard announced its partnership with Toronto-based Dream Payments. Its Dream Payments Hub is designed to work with insurance firms in order to push money out through Mastercard’s network to connected bank accounts.
Asked what Visa Direct can offer in Canada that Mastercard Send can’t, Weiner’s answer was straightforward: a larger customer base.
“We just have access to so many more Canadian bank accounts,” Weiner says.
Visa debit cards are used by TD, CIBC, Scotiabank, and Royal Bank. Mastercard debit entered the Canadian market in 2016 working with the Bank of Montreal.
According to a Payments Canada study, in 2015 debit card payments accounted for about one-quarter of total transactions in Canada. But when the value of those transactions is considered, debit was only 2.5 per cent of total value. For high-value transactions, cheque and paper was still the most commonly-used method, followed by electronic funds transfer.
