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The State of Canadian Digital Banking

Canadian Digital Banking

The pandemic has been the primary driver of rising digital banking usage this year in Canada and will continue to drive further spending by banks’ on their digital platforms in the near term and long term as user experience on digital platforms is now more important than ever. Let’s have a closer look at some of the numbers behind the growth:

The Canadian government continues to explore the benefits of open banking (also now known as consumer-directed finance), which would allow banks to substantially improve their digital user experience and tie consumers more closely to their digital banking platforms. Here’s a detailed look at the benefits of open banking.

Did you know VoPay empowers banks to provide a better payment experience for their clients through a single API? Learn more.

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FintechOnline Payments

Most Viewed Payment Infographics of 2020

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This year has been marked with incredible resilience, recovery, and innovation with the payments industry playing a vital role in supporting businesses and citizens through the pandemic.

Here are our most viewed payment infographics of 2020:

E-Commerce Growth & Payment Preferences

Small Business Digital Payments Adoption

Payment Methods by the Numbers

The Accounts Payable Digitization Opportunity

A Cashless World

The Real Cost of Processing Payments

Small BusinessPayment Pain Points & Trends

Account Payable By The Numbers

See our fintech related infograhics here!

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FintechOpen Banking

Benefits of Consumer-Directed Finance

VoPay Open Banking

This content was recently presented by our friends at FDATA North America to one of the big 5 Canadian banks.

How Consumer Financial Data Access Works Today

  • šCredential-based authentication – “screen scraping”š
  • Some FIs restrict or block accessš
  • Messy, uneven consumer experience
  • šLimited visibility into the ecosystem for FIs and regulatorsš
  • But the only way for Canadians to reliably use third-party tools today

What is Open Banking?

For an open banking framework to deliver on its benefits, it must secure customer trust by ensuring appropriate privacy safeguards and consumer protection as well as support the safety and soundness of the financial sector. 

Standardized:

  • Guaranteed data right for consumers
  • Consent and authentication flows
  • Liability modeloInteroperable technology to consume data
  • Regulatory oversight of third parties

The consumer is fully empowered.

Why Open Banking?

  • Under an open banking framework, consumers and businesses are empowered to share their financial data with a broader range of financial service providers. 
  • Open banking systems incorporate effective safeguards that ensure the stability of the financial system, protect consumer privacy and rights, and ensure the security of consumers’ financial information. 
  • Open banking holds the potential to reduce consumer costs, improve their ability to manage financial services, and gain access to the wider range of services in the ecosystem while ensuring protection, proper regulation, and stability of the financial ecosystem.
  • FDATA NA members today provide ~3.5 million Canadians with aggregation-facilitated access to third-party technology tools. 

Benefits of Open Banking

Consumers will receive better customer service, personalized intuitive financial products at lower prices and improved financial health. 

Businesses will be able to use technology to streamline financial operations, improve cash flow and financial management and gain better insight into their customers by understanding how, when and where they will spend money.

FinTechs and innovators will revolutionize how people and businesses spend, manage, and understand their finances. oOpen banking provides a wider range of marketplace participants with access to consumer financial data that can be leveraged to develop products and services that are more tailored to consumer and small business needs.

Banks will reimage their business model to generate new revenue, provide a broader suite of products and services without the burden of building and maintaining proprietary solutions, and deliver better customer service by leveraging data insights.

Regulators will leverage technology and innovation to improve effectiveness through tools like automation, artificial intelligence and predictive analytics. oAs the number of fintechs grow and introduce new business models and techniques into the ecosystem, regulators can rely on open banking to adapt to those new models and ensure regulatory compliance. oRegulatory oversight is needed to understand how existing policies apply to the changing financial environment and account for new risks.

The Global State of Open Banking

  • Policymakers are realizing the open banking regime enables significant innovation and consumer benefit.
  • Various markets around the world are considering, adopting, and/or implementing laws and regulations to support open banking systems.
  • This movement is the result of advocacy by consumer champions, fintechs and other engaged stakeholders.
  • Successful regimes focus on the importance of protecting customer interests and their rights to data, while delivering in a way that promotes a secure and safe ecosystem.

Open Banking Flourishing in the UK

  • 2 million users
  • 200 regulated providers
  • 204 third party providers + 76 account providers
  • 92 regulated entities with at least one proposition live with customers

Status of Open Banking in Canada

  • Four million Canadians have signed up for “screen scraping services”
  • First introduced in Budget in 2018
  • Finance Canada’s Initial Consultation on Open Banking Finished:
    • FDATA North America engagement in roundtable discussions
    • FDATA NA submission was published informal consultation
  • FDATA North America Discussed the Benefits of Open Banking:
    • Educated and engaged with regulators, parliamentarians, and representatives from Canadian financial institutions on the importance of open banking and a well-controlled system of permissioning financial data access following the introduction of the consultation report
  • After a brief hold due to COVID-19 pandemic, Finance Canada resumed virtual consultations in November and will continue engagement through the end of year 

Consumer-permissioned data is the lifeblood of financial technology tools so we’ve featured some of the top open banking movers and shakers here!

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FintechOnline Payments

2020 E-Commerce Growth & Payment Preferences

VoPay e-Commerce

The pandemic has helped accelerate the shift in consumer buying habits from in-person to e-commerce channels. This year Black Friday shopping numbers showed in-store traffic down by half from the year before with online spending up 22%.

Even before the holiday spending season, the number of consumers who made half or more of their monthly purchases via e-commerce nearly doubled during the pandemic, according to Capgemini research. Its expected the shift from retail to e-commerce will continue even after the pandemic. Here’s a look at some numbers:

VoPay provides payments as a service through a single API that seamlessly connects businesses to the banking and payment ecosystem enabling anyone to offer efficient and simple payment processing. Here’s how we empower marketplaces.

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FintechOpen Banking

Data Aggregation: Using API’s to Provide a Full Financial Picture

VoPay Data Aggregation

Last month we joined our technology partner Fiserv on the virtual main stage at API World to discuss how financial data aggregation works, its benefits and real world use cases. Here’s a summary of what we shared with a focus on payments:

Why It Matters – Consumers Want Enhanced Experiences

• Over 50% of consumers agree a personalized financial dashboard will save them time, be time well spent and make them feel confident in achieving their financial goals.

• More than 1 in 4 consumers want you to recognize patterns over time and provide relevant recommendations based on those patterns.

• 26% of consumers value sophisticated suspicious activity monitoring possible through an aggregated dashboard of their finances.

• 66% of consumers are interested in aggregated statements to track spending across multiple accounts.

What Is Financial Data Aggregation

Financial data aggregation enables financial technology companies to empower their users to give permission based access to data related to checking accounts, savings accounts, investment accounts, credit card accounts and more to provide optimized finacial products and solutions.

How Does Data Aggregation Work?

Aggregation is the process and methods by which data from multiple sources are collected, standardized and made available through a common interface. Here’s how the process works:

Aggregation in Action – Faster Payments 

The Challenge

VoPay wanted to enhance existing EFT / ACH payments by verifing:

• Contact information for KYC and fraud prevention purposes

• Funds before initiating EFT/ACH transfers 

• That a transaction occurred

The Solution

VoPay’s Intelligent EFT / ACH (iQ11) payment service offers:

• North American wide bank and credit union coverage

• Quick and reliable data access for optimal user experience 

• Full white labeling capabilities for a flexible design

• Consistent data security and integrity

You can learn more about VoPay’s open banking payments solution here.

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FintechOnline Payments

The Current State of Canadian Fintech Adoption

Canadian Fintech Adoption

Fintech adoption has nearly tripled in Canada, increasing from just 18% in 2017 to 50% in 2019. Canadian digital-only banks will experience an increase in account holders between 2020 and 2024 at an annual growth rate of 8.9%. For the same time period the annual US growth rate will be 19.8% and 12.7% in the UK. Canada’s big five banks are still dominating the market along with the fact that there is a very small underbanked population for digital-only banks to target. Here’s a closer look at the current state of fintech adoption:

VoPay can empower business banking clients to offer their own customers a better debit and credit experience by allowing seamlessly integration with business banking services and optimizing payment operations with just one API. You can learn more here about our solutions.

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FintechOnline Payments

Welcome to The World of Payments as a Service

VoPay API Layer

The Payments as a Service (PaaS) model eliminates the need for costly and lengthy implementations. Instead, it shifts to a subscription-based technology designed to reduce upfront IT spend, enhances client flexibility and gives access to the latest technologies. PaaS is designed to allow merchants and others to leverage local, regional and global payments options through a single interface. The complexity of moving funds between providers is handled by the PaaS layer and is hidden from the user. Here’s a look at the layers that make up VoPay’s PaaS solution:

The solution is designed to allow businesses to utilize mulitple payment options through a single open API  to meet their specific payment needs. Because only one API is required, you’re only required to maintain one relationship.

Through VoPay’s API layer you can access the following payment services:

Intelligent EFT / ACH (iQ11): Accept instant bank account verification payments, improve payment speed and reduce NSFs. Learn more here.

EFT / ACH: Seamlessly facilitate bank payment processing by connecting to North America’s banking system. Learn more here.

Interac e-Transfer for Business: Send thousands of near real-time payments with higher funding limits with just an email. Learn more here.

VoPay Instant (Visa Direct): Send money directly to almost any Visa card holder in real-time. Learn more here.

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FintechOnline Payments

How Does Visa Direct Work?

VoPay Visa Direct

You can access our Visa Direct service (AKA VoPay Istant) through our developer-friendly API or payment portal to send real-time payouts to almost any Visa Debit cardholder in Canada 24 hours a day, 7 days a week. Last quarter global Visa Debit spend was up 20% to $1.2 trillion while credit was down 9%, to $1.1 trillion. 

There are several use cases for the payment service including:

Earned Wage Access: Employers can send real-time payouts of earned wages to workers’ eligible debit cards 

Lending: Lenders can offer a real-time loan funding option and exceed customer expectations when they need money quickly

Insurance: Optimize the insurance claim payout process and maximize customer satisfaction 

Gig Economy: Companies can give gig workers the option to receive speedy payouts for their work 24/7/365

Product Features 

Speed: With Visa Direct, funds can be available in a recipient’s account within 30 minutes of transaction approval—all day, every day.

Convenience: Seamless payments to the card your customers already carry in their wallets.

Security: All Visa Direct transactions are processed via VisaNet, protected by Visa’s multi-layered security.

Fully Customizable: Visa Direct can be fully integrated through the VoPay API for a seamless end user experience to fit your brand needs so you stay top of mind.

Cost Effective: Visa Direct is a low cost alternative for cheques, ACH, and EFT, with half the administrative work and paid in real time. You not only save on payment method cost, but also on resource and management time so your team can focus on what really matters.

How It Works?

Businesses only require the recipient’s Visa Debit card number to send money (no financial  information of the recipient is required for payment). Recipients automatically receive funds in their Visa Debit account within 30 minutes with no action is required on their part.

Key Benefits

Easy Signup Process: No recipient banking information required.

Real-Time Funding: Deposit funds within 30 minutes, 24 hours a day, 7 days a week.

Quick Reconciliation: Real-time acknowledgement and daily status reports.

Market Presence: Leverage Visa’s large cardholder network,

Other Payment Tools: Access to end-to-end EFT payment solutions including bulk e-transfer.

Seamless Integration: Access the service through VoPay’s developer friendly API.

Get In Touch

Schedule a chat with one our product specialist to learn more!

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FintechOpen Banking

Open Banking Movers & Shakers – Q4 2020

VoPay Open Banking Movers & Shakers Q4

In the summer we released our first quarterly ‘Open Banking Movers and Shakers‘. We’re pleased to share an updated list with several new additions. Welcome Wealthsimple, Borrowell, Financial Data Exchange, Payments Canada and Marble! All the organizations below have helped make 2020 the biggest year yet for open banking (AKA open finance or consumer-directed finance). Current projected open banking growth through 2026 is over 24%, reaching $43.1 billion in value.

VoPay Open Banking Movers Shakers Q4 -2020

We’ve listed everyone below that’s included in the graphic above for your browsing convenience. Want to be included in next year’s ‘Open Banking Movers & Shakers’ list? Send us an email at: press@vopay.com

Data Networks

•  Envestnet Yodlee

• Flinks 

• Fiserv

• Plaid

• MX

• Inverite

• Direct ID

• M Science

KYC/AML

• Equifax

• Experian

• Transunion

• Trulioo

Lending

• Quicken Loans

• Kabbage

Marble

Spending / Savings

• Mogo

• EQ Bank

• Petal

• Borrowell (NEW ADDITION)

Payment-As-A-Service

• Interac

• VoPay

• Trustly

Investing

• Betterment

• Morningstar

• Wealthica 

• Quest Trade

• Wealthsimple (NEW ADDITION)

Accounting

• Xero

• Intuit

Policy / Data Standards

• FDATA North America

• Fintech Growth Syndicate

• Canadian Lenders Association

Financial Data Exchange (NEW ADDITION)

Payments Canada (NEW ADDITION)

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FintechOnline Payments

Small Business Payment Pain Points and Trends

Payment Pain Points

This month Payments Canada released survey results from Canadian small business owners show that 1 in 4 Canadian businesses struggles with cashflow and that the top 2021 priority for 2 in 5 small businesses will be to improve overall efficiency to simplify and enhance everyday payment interactions. Some other pain points and trends from the survey include:

VoPay eliminates all these payment pain points through its single API or payment portal:

• Improved cashflow through faster funding times and reduced NSFs

• Reduced fraud through verified users and bank accounts

Increased efficiencies through paperless payments requiring no banking information and real-time reporting

Learn more here.

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