Online Payments

We’ve teamed up with Plaid to help make payment processing faster, more efficient and more secure. Before we dive into how it all works let’s get to know each of them a bit better.

Meet VoPay

VoPay is a leader in payment innovation, digitizing direct bank payments with speed and transparency. The VoPay Platform enhances how digital platforms initiate and accept financial transactions using a single, open API.

Meet Plaid

Plaid is a technology platform and data network that enables applications to connect with users’ financial accounts. They focus on lowering the barriers to entry in financial services by making it easier and safer to use financial data. Today, they support developers across North America and Europe.

How VoPay + Plaid Payments Work

VoPay layers Plaid’s Auth, Identity, Balance, and Transactions solutions over top of its core payment engine to deliver the most powerful EFT payments solution in the market.  The result is a seamless payment experience with reduced NSFs, verified bank accounts and improved payment speed.

Current Payment Challenges

There are three main hurdles when it comes to existing EFT payments:

1. Lack of visibility: Paper checks or electronic payment systems for bank account payments do not allow visibility into the bank account at the time of the payment.

2. No traceability: Businesses accepting check or electronic payments can not track the payments, the status of the transaction or when the funds will be available.

3. High risk: The current paper check and electronic payment service do not offer balance verification at the time of transaction.

Common Payment Use Cases

Some of the most common use cases include lending and market places where the solution can dramatically reduce NSFs, optimize cash flow, streamline back-office operations and improve payment security. Another would be legal and real estate where you can increase revenue with significantly reduced fees and decreased chargeback risk.

In summary, together VoPay + Plaid payments improve efficiency by verifying user identity and bank information prior to processing the transaction, minimize NSF fees by having visibility into available funds and reduce the access to funds time to just 24 hours.

Are you a developer? View more details here.

Our friends at Payments Canada recently conducted a survey that showed how the pandemic has dramatically shifted Canadians’ payment habits. As we look at some of the highlights below, it’s clear the shift to paperless and cashless spending habits has dramatically accelerated. For example, 62% of Canadians are now using less cash. How have your spending habits changed and what’s your prefered method of payment?

A staggering amount of money is spent on Account Payable (AP) processing because of payment inefficiencies. In fact, 80% of SMB still pay their AP with paper checks. Let’s take a closer look at the amounts spent and how you can make payment processing paperless!

The cost of multiple check, EFT / ACH or wire payments can quickly add up and lead to significant use of operational resources. We look at the real cost of each of these payment methods and offer a simple way to digitize your bank payments with next-generation EFT / ACH.

Every time a consumer accepts or sends a direct deposit, they’re using an electronic funds transfer or EFT. Every time they withdraw cash or deposit a cheque into an ATM, they rely on an electronic funds transfer. The same goes for tapping their debit card at the grocery store. Or using a bank’s website for online banking or bill payments.

Electronic funds transfers handle our salaries, bill payments, cash flow, mortgages, and online and in-store purchases. They give us unprecedented digital access to funds without ever entering a physical bank, talking to a teller, or handling cash. In short, an electronic funds transfer is the digital transfer of money from one account to another. 

Today, we’re looking at how electronic funds transfers are changing the world of digital banking—and how your customers are (or should be) using EFTs.

EFTs/ACHs: Moving trillions of dollars digitally

In the U.S. all electronic funds transfers go through the Automated Clearing House (ACH) Network. ACH transfers are the same as EFTs in Canada, only they are all routed through the ACH Network—one of the largest networks in the world. 

In fact, in 2019, the network moved 24.7 billion electronic payments and $55.8 trillion. It is how 93% of American workers get paid. It’s also how millions of Americans will receive stimulus payments during the coronavirus emergency. Payments Canada reported that electronic payments accounted for 73% of all transaction volume versus 21% for cash in 2019. 

Digital banking innovation and electronic funds transfers

Electronic funds transfers are the fastest, most secure, cost-efficient, and digitally connected way to send and accept money. The pace of innovation is showing no signs of slowing down. But where a bank EFT/ACH services may fall short, financial technology companies are partnering and helping to lead the charge toward more innovation in digital banking. 

Using VoPay’s EFT/ACH and iQ11 products, for example, customers can make e-commerce purchases without using a credit card. They now have instant access to available funds online and via mobile. Let’s look at innovations in electronic funds transfers and how your customers can use—and benefit from—EFTs/ACHs.   

5 ways your customers use (or should be using) EFTs/ACHs every day

1. Accept funds digitally

Just like a credit card, your customers can make purchases online using their checking accounts, which you can accept instantly with our EFT/ACH product. A great example of this is for an e-commerce site that collects payments at checkout. Rather than having customers racking up credit card debt, they can spend their money one-time and using recurring payments online. With VoPay’s Intelligent EFT / ACH called iQ11, bank account information is tokenized, thus encrypting personal data for security.

2. Send funds digitally

That same e-commerce platform business, as another example, may need to pay users, vendors, service providers, and/or bills. Using electronic funds transfers from fintech companies, rather than banks that don’t have this service, allows them to send direct bank payments. 

3. Move bulk payments

Likewise, EFTs allow customers to pay, collect, track and reconcile payments to and from many vendors and customers at once. This is a time-saving feature for service providers, for example, that charge monthly fees to many users at once. With VoPay iQ11, customers can validate and verify the user ahead of time, as well as the transaction and funds within 24 hours to help prevent NSF fees and boost security. They can also gather real-time acknowledgement and daily status reports to keep track of it all.

4. Facilitate payments through digital platforms

For those e-commerce sites, SaaS providers, and other customers that facilitate payments on their platform, VoPay’s accessible API is a secure and easy-to-use third-party solution. Being able to accept payments is an essential, yet often missing part of supply-chain management platforms and accounts payable software workflows, for example.

5. Me-to-me: Transfer funds between accounts

Transferring money within an organization or between a person and their business can be fast, safe, and easy with EFTs/ACHs. VoPay’s platform, for example, links all bank accounts both locally and internationally—and allows direct transfers. 

These are just a few of the ways in which you and your customers are using and benefiting from electronic funds transfers. The future of banking is here. It’s instant, secure, and digital, thanks to EFTs. 

Learn more about EFT / ACH payments.

To our clients, partners, stakeholders and community,

During these unprecedented and challenging times I wanted to update you on how we’re approaching the situation at VoPay as the novel coronavirus (COVID-19) continues to spread and impact our families, friends, businesses and communities. We are all in this together.

Our first priority is to ensure the health and safety of our people and help curtail the communal spread of this disease. In support of flattening the curve of the pandemic and following the guidelines set out by government officials and health authorities, we have temporarily instituted a work-from-home policy for all VoPay team members for the foreseeable future. We have also cancelled all business travel to reduce any risk of our employees being stranded internationally, and we currently have no plans to attend any events through the end of Q2 to support social distancing measures.

Fortunately, we are able and are accustomed to operating our business remotely. We have well-developed business continuity plans and have therefore experienced no disruption since enacting these policies. 

Please be assured that our entire team is well-equipped to deliver an industry-leading digital payments solution and training to support businesses during this challenging period. This is a time for our communities to come together and for us to support one another. With that said we are deferring our setup fee for all small businesses that require an enhanced digital payments solution for 90 days from the date of sign up. Please get in touch if you have any questions.

Our decision-making with respect to COVID-19 will continue to be informed by the knowledge of local and national health authorities and we will continue to evaluate our policies as the situation evolves. 

We truly appreciate your partnership, support and continued trust in us. 

Take-care and stay healthy,

Hamed Arbabi

CEO & Co-Founder

VoPay

Even before the coronavirus outbreak, people were increasingly using cashless payments and digital checks (or e-checks) over cash, coins, and paper checks. What may have started out as a convenience, has—in the midst of a global health pandemic—also become the smarter and more hygienic way to pay. This is especially true as more people turn to e-commerce, digital payments, and digitized checks to transfer money (and pay bills) safely from the comfort of their home.

Money, of course, changes hands frequently multiple times every day. It is a very high-touch surface. However, since the COVID-19 outbreak, people and businesses have been avoiding cash for this very reason. To be clear, the World Health Organization did not confirm that banknotes transfer the virus. However, according to Bain & Co. partner, Thomas Olsen, there is a “psychological factor” for many people who believe it to be unclean and so choose to avoid it.

“Cards only” is quickly becoming the norm in brick-and-mortar businesses. 

This way of thinking may not only accelerate the already growing use of cashless, contactless, and digitized checks now but also in the future. Many of the same hygiene practices that we have become used to during this time, may stick with us in the future. Cashless payments and digitized checks, which we’ll discuss in more detail, are among them. 

Digitizing checks: Say goodbye to paper checks

Digital, digitized, or electronic (e-)checks performs the same function as a traditional paper check. However, digitized checks come with modern perks such as convenience, lower costs to issue, increased security features, and faster turnaround. Paper checks take days to process and are often fraudulent or bounce. Digitized checks can be delivered in real-time with the same day or overnight fulfillment. 

This time savings alone—not to mention the cost and convenience factors—should be enough to finally say goodbye to paper checks. In the U.S., for example, check payments fell 7.2% per year from 2015 to 2018. But it’s still not entirely gone. In Canada, for example, financial institutions still process nearly a billion checks every year. 

We wrote a post called Paper To Plastic To Digital Payments: Evolution Of Credit Cards And Checks if you’re interested in further reading. 

Why are nearly a billion checks still changing hands in Canada when there’s a modern, convenient, faster, cheaper, and more secure alternative? “People default to what’s familiar, unless there’s something to jolt you out of it,” Jodie Kelley, CEO of the Electronic Transactions Association told CNBC recently. “Contactless payments have come up as a new option for consumers who are much more conscious of what they touch.” What if this same thinking applied not to just contactless payments, but to paper checks as well? 

Ready for a secure and safer world of digital checks and payments

There are services, albeit VoPay included, that processes and verifies digitized checks—and digital payments, invoices, bulk e-payments, you name it—almost instantly. When it comes to digitizing checks, no physical material ever needs to be touched or changed hands. Personal financial information, such as our bank account details and bank branch numbers, ever need to be mailed or shared. 

What if we took it one step further, moving beyond an electronic version of a paper check and tokenized the whole process? At VoPay, for example, the entire digital payments and digital checks system are tokenized. We wrote a post about tokenization and digital payment security, but essentially, it means that we’ve scrambled (algorithmically) the bank information and issued a secure token in its place. 

During this time of health and safety uncertainty, many of us have turned to online shopping and delivery and digital banking to pay our bills or accept money transfers. People are steering away from handling cash back and forth. It’s a safer, more secure, and more convenient way forward. We believe that the same holds true of paper checks.

Learn more about digital payments and VoPay.

During this time of uncertainty, health and safety authorities recommend practicing social distancing. This means maintaining a safe distance from others and avoiding local public transportation. Because of this, large scale events and gatherings, such as March Madness, shows at the Met, Carnegie Hall and Broadway, and Disneyland and Walt Disney World, have been cancelled or closed. Companies are beginning to encourage employees to work from home. Now is the time to unwind, stay home with loved ones and connect in person on a small scale or digitally. 

One (very thin) silver lining throughout this global pandemic is the digitization of our lives should we need to stay home for a time. Here are five basic functions that can continue with relative normalcy as we practice safe social distancing. 

5 Functions during social distancing supported by digitization 

1. Get paid, pay bills, and transfer funds online

Digital payments have made it possible to get paid, pay bills, transfer funds, and make purchases online Perhaps without realizing it, the digitization of payments has changed how we do everything online. Employers can transfer funds digitally right into their employees’ bank accounts in almost real-time. People can pay rent, health care and utility bills, online—without ever having to physically handle money, cheques, or even go to a bank. 

Interestingly, a financial services agency, The Futurist Group, recently conducted a two-wave study on U.S. consumers and contactless payments before and after the coronavirus. Of the 3,187 Americans surveyed, about 38% now see contactless (or digital payments) as a basic need or feature of payments, up from 30% a year ago. Those who don’t need contactless payments has fallen from 41% in March 2019 to 33% in March 2020.

A World Health Organization representative explained that “money changes hands frequently and can pick up all sorts of bacteria and viruses,” advising the use of contactless payments whenever possible. 

2. Purchase groceries online and order food delivered

E-commerce sites, restaurants with online ordering options, food delivery companies, and digital payments have all made it possible to have food delivered right to our doors. We can shop online for essentials (and non-essentials) and have them delivered directly to us within days or even hours. We can order breakfast, lunch, dinner, snacks, groceries, and medications online. We can support local businesses, such as owner-operated restaurants that are otherwise hurt by social distancing, by ordering their meals via phone or online for direct delivery.

3. Stay connected to loved ones digitally

It is essential to maintain contact with our friends and family members during this time. Discuss their health, wellness, safety, and happiness to ensure that they have everything they need. Applications both on our phones and computers have made it possible to connect and check-in with our loved ones and those who may need us, instantly and digitally. Of course, whenever health and distance allow for it, socializing in person (in small groups) can do wonders for our overall happiness during this time. 

4. Work online from home and connect through video meetings 

Depending on our occupations and health, we may be able to work from home and conduct meetings online. Just as applications allow us to stay digitally connected, many of these same apps allow us to stay connected to our teams via email, video, instant chats, and shared documents, for example.  

5. Entertain, inspire, and educate ourselves online

While major in-person cultural events are cancelled for health and safety reasons, there are smaller-scale ways to entertain ourselves. For example, companies like Netflix, Amazon Prime, DisneyPlus, and CraveTV have made it possible to watch thousands of hours of movies and shows. Likewise, there are informative, entertaining, and inspirational e-books, podcasts, social channels, videos, documentaries, articles, news sites, articles, you name it, all available online.  
According to health and safety authorities, a few things that you can do to support yourself are to unwind, take care of your mental wellbeing and happiness, connect with others, and maintain positive thinking. Prepare yourself, but take some comfort in knowing that the digital world has options to support some of your needs and welfare. 

Consumers everywhere expect the same choices that they get cross-industries and services. They decide how, where and when they pay. Lenders have taken steps to rise to the occasion, adding new systems, billing and payment options to stay relevant and competitive, meet the digital demand and increase profits. But has it been enough? 

A 2018 Payments Canada study found that more than 80% of Canadian small businesses want more payment options. They’re willing to integrate new technologies into their operations and move away from cash and cheques—if they had other options. Conversely, in 2017, customers paid 78% of their loan payments electronically. What’s more is that Millennials—a majority of today’s workforce and borrowers—expect to do everything digitally, not paying their loans online but with their debit cards.

As more systems go digital to stay competitive and meet consumer expectations, how can the lending industry be more innovative? 

Loan management systems were designed as a streamlined way to evaluate, approve or deny, offer, provide and collect funds to and from customers. However, as with all digital systems and services, it’s time for an update. 

How loan management systems (LMS) benefit from digital bank payments

As the leader in payment innovation, VoPay’s technology offers a powerful layer that is designed specifically for the lending industry. Our iQ11 software is used for digital bank payments and loan collection and bulk e-transfers for disbursement. Here’s how LMS benefit from our software and digital payments:

1. Streamline disbursement and loan collection

VoPay’s API payment solution offers one centralized platform for all payment processes and loan collections. Businesses can easily send and accept money, set up and schedule payments, send bulk payments and review payment reports. Using our dashboard, users can view and manage multiple payments at every stage in their lifecycle from one single digital hub. 

2. Eliminate pre-authorized debits (PAD) initiation

When pre-authorized debits (PADs) were first designed, they were a convenient way to set up multiple bill payments and transactions. However, let’s look at the customer journey of setting up a PAD in Canada. First, whoever is setting it up has to fill out a PAD agreement in writing, online or over the phone. The bank then sends a written confirmation that acknowledges permission was given for the withdrawals. Three days later, the first withdrawal can happen. This process probably doesn’t meet consumer expectations today. Our Intelligent EFT/ACH (iQ11) payment service eliminates the pain points of PAD initiation.

3. Faster processing and reconciliation times

The Payments Canada study found that 54% of businesses believe they are spending too much time on payment processing activities. Our software makes it easier for businesses to be more efficient and effective with payment and loan processing. We’ve set up real-time acknowledgement and daily status reports into our dashboard for quick reconciliation. Likewise, beyond streamlining the signup and digital payment process through email, our funding process is near real-time. Businesses can now send funds within the hour or overnight, depending on volume, which we’ll cover in our final point. 

4. Reduces NSF and return transactions

Similar to the amount of time that it takes to set up a pre-authorized debit, it takes time for financial institutions to accept, review and process cheques—and even longer for the payments to reach its end recipient. Because of both our faster processing and reconciliation times and our use of digital bank payments, non-sufficient funds (NSFs) and return transactions are significantly reduced. Rather than using cheques or credit cards that are subject to longer processing times, we developed next-generation bank payments with our Intelligent EFT / ACH (iQ11) payment service. This informs the business in near real-time of whether there are sufficient funds but without ever sharing any bank account details or risk.  

Read more about the cost and risk of NSFs in our recent blog post. 

5. Enables efficient bulk payout

Lastly, our e-transfer bulk payout enables businesses to disburse loans instantly by only using email addresses. Up to 1,000 Interac e-transfers can be sent in almost real-time and up to 100,000 can be sent overnight. Plus, up to $10,000 can be sent per payment to multiple recipients all at once through our robust API. Not only does this streamline the bulk payment process, but it allows lenders and businesses to meet today’s consumer expectations for experience and efficiency. 

Learn more about VoPay today.

This post is based on the comprehensive findings published by Payments Canada in its annual 2019 Canadian Payment Methods and Trends report. 

Canada exchanges almost $210 billion worth of payments and financial transactions on average every business day. More of these transactions take place electronically each year as Canadian payment systems and business processes go digital. According to Payments Canada’s 2019 Canadian Payment Methods and Trends report for 2018, the payment market grew to 21.1 billion transactions worth more than $9.9 trillion. 

Here is a look at the most significant findings and statistics for both Point-of-Sale (POS) and remote transactions in Canada in 2018.

Canada’s cashless payments: Point-of-Sale (POS) stats

Point-of-sale (POS) transactions take place either physically or virtually via online and e-commerce vendors and payees, brick and mortar merchants, or mobile and in-apps. This space is undergoing massive growth, evolving largely because of electronic payments and to support mobile e-commerce. 

Fast facts on Canada’s POS transaction growth in 2018 

The big picture of POS in Canada

1. The total volume of POS transactions in 2018 was 15.7 billion.
2. The total value of POS transactions in 2018 was over $856 billion.
3. The average POS transaction value was $54 in 2018.
4. In the last five years, POS volume has increased by 5% and value by almost 25%.

Types of POS payments: Debit is king in Canada

1. Debit cards are now the most widely used payment method at 6 billion transactions, overtaking cash transaction volume for the first time in 2017. 
2. Contactless debit made up 60% of the total volume of contactless transactions and 35% of the value. The average debit transaction was $42.
3. Credit cards are the second-most-used POS payment method in volume and had more transactional value than all other POS methods combined in 2018.
4. Despite 4.5 billion POS cash transactions—it continues to decline every year, down 40% from 2013.

Mobile wallets and contactless transactions

1. Mobile device and contactless card payments totalled 4.1 billion transactions (a 30% increase since 2017) and $129.9 billion value in 2018.
2. More than one-third of Canadians used a tablet, phone or device to make a purchase in 2018.
3. Canadians who use credit contactless payments tend to be younger, have higher earnings and live in British Columbia and Ontario.

E-commerce POS and credit cards

1. Approximately 20% of all of Canada’s shopping has migrated to e-commerce.
2. Credit card usage is faster growing than debit because of rewards points and the perceived ease-of-use and security for e-commerce.
3. Canadian online merchants and businesses lack diverse payment options for e-commerce.

Canadian businesses love remote payments (and EFTs)

Remote transactions and payments are all those that don’t require a POS device or application. This often means that payors rely on a third party such as a bank or financial technology partner to route payments through Electronic Funds Transfers (EFT), cheques, and other payments. A few examples include bill payments, direct deposits, pre-authorized payments, and P2P and B2B transactions. 

Fast facts about remote payments in Canada

1. There were a total of more than 4.5 billion remote transactions in 2018.
2. Remote transactions totalled approximately $9 trillion in value in 2018.
3. These transactions make up 91% of the total Canadian transaction value, but only 25% of the total volume.
4. The average remote transaction value was $1,993.

Electronic Funds Transfer (EFT) transactions: Number one for businesses

1. EFT transactions are the leading payment method for businesses both in value and volume—and overtook cheques for the first time in 2018.
2. EFT growth lessened from its growth spurt in 2017 but accounts for 49% of remote payment value.
3. Electronic payments totalled 73% of the total payments volume and 59% of value in 2018.
4. The average EFT transaction size was $1,718 in 2018. 
5. EFT and cheques dominate remote payments in Canada totalling $8.8 trillion in combined value, but credit cards and online transfers are growing quickly.

In the end, Canadian businesses are continuing to move all systems, including payments, to digital. While they are not letting go of paper cheques and cash as quickly as consumers are, they are increasingly adopting electronic payments. Business owners and consumers will always seek more efficient, faster, and easier ways to make payments. 

Learn more about VoPay and how we’re digitizing payments in Canada.