Canadian Retailer - Store 2013 - 88

RCC 5OTH ANNIVERSARY TIMELINE

the competition and technological
changes so you can meet the needs
of customers who want the flexibility
to pay in multiple different ways and
multiple different times? And, how
do you integrate that into your inventory system? At the same time, on the
back end, how do you manage all the
data and the information that is coming out of this in a time when everyone is talking about how to market
to customers in a more effective and
more customized way?”

1980s
A new way to pay, interac comes
to Canada

Another game-changer for retailers, Interac made processes at the
cash more efficient and convenient for
shoppers; this technology also paved
the way for more reliable and efficient
loyalty programs and the gathering of
customer information. Like barcode
technology that preceded it, Interac
made it easier for businesses to manage their operations from a central location. In 1986, the first Interac Cash
(ABM) transaction took place and
the Interac Cash service launched.
By year-end, 6.2 million transactions
had occurred. Twenty-six years later,
by the end of 2012, 4.357 billion debit
transactions were recorded.

across the country (the service is
known as Interac Cash). The Association continued to grow its membership throughout the decade. Following on the success of its Interac Cash
service at ABMs, Interac Association
launched Interac Debit first as a pilot
project in the Ottawa region in 1990;
it was then rolled out from coast-tocoast in 1994.
“Building on the confidence Canadians had placed in the Interac
brand, Interac Debit was an immediate success,” comments Carolyn Hubberstey, Head, External Affairs, Interac Association. “Interac Debit is a
fully online, real-time, PIN-based national debit product that allows Canadians to make purchases at retailers
across Canada. We know merchants
are understandably concerned about
price pressures associated with payment acceptance costs. That’s why
Interac Debit plays a vital role in the
market; it is low-cost for merchants
with a flat-fee, pennies per transaction
cost regardless of the sale price.”
For retailers, Elizabeth Evans explains Interac’s value is that it moved
payment out of the cheque-writing
mentality into a different type of debit and credit system. “Credit cards
became much more available at this
time and they go hand-in-hand with
the growth of the industry,” she says.

1985: The association plays a pivotal role in the General
Agreement on Tariffs and Trade (GATT) talks, reinforcing the
industry’s position and advocating for appropriate change.
“The introduction of Interac reduced operating costs, even eliminated some,” comments Paul Clark,
Jackman. “For customers, Interac
provided faster access to funds and
increased our spending habits because we had access to money whenever and wherever we needed.”
Interac Association started in the
mid-1980s as a cooperative venture
between five Canadian financial institutions. These institutions created
the vision of a single national shared
network that would allow Canadians
to access their funds from ABMs all

88 |

“When you think of retailers trying
to have some kind of checks and balances and controls over their business, you can certainly see why they
would value a technological solution
to payment.”
Interac also allowed cash to flow
faster. “For most retailers, cash flow
is one of the dominant aspects of
the business—turning inventory and
cash flow—rather than taking two
weeks to clear cheques,” Evans explains. “With Interac, you now could
use this system to clear your cash
flow in a matter of days.”

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The future of payments

“We are certainly continuing to innovate and develop value-added solutions for the market, including in the
mobile space,” says Hubberstey. “For
example, in building Interac Flash, the
contactless enhancement of Interac
Debit, we’ve been able to package all
the benefits of Interac Debit in a faster
and even more convenient payment
option for merchants and consumers.
“Interac Flash delivers on security,
speed and convenience while continuing to be a low- cost payment acceptance option for merchants with the
online, real time good funds model.”
Hubberstey says RCC is a great
advocate for its members and has a
strong track record of working on important issues—such as payments—
that impact Canadian retailers.
“We enjoy a very productive working relationship with the organization
and the RCC team. We have worked on
a number of files, particularly payment
acceptance costs. While we know that
payment acceptance is just one of the
costs of running a business, it is a line
item that is becoming less predictable
and more costly. We have worked with
RCC to help educate merchants that
their payment acceptance decisions
matter and that they have some control.”
Mobile wallets

The next evolution of payments is
the mobile wallet concept of putting
all your debit cards, credit cards and
loyalty cards onto your smartphone.
“We are seeing that this innovation, to some extent, is being done
by the retailers themselves,” Evans
says. “There’s a collaboration going
on currently between some of the
major companies in an attempt to
develop this technology so they can
control it, its costs, etc. Retailers are
at point where they are large enough
and have the sophistication to say,
‘we don't think we should just be dependent upon the credit card companies and third-parties to be the
ones who develop this and take all of
the financial benefit, if in fact we can
figure it out for ourselves’.”

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Canadian Retailer - Store 2013

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