Why you should launch new digital payment services before the dust settles
Digital technology has been changing at what seems like an ever-increasing pace for quite some time now. As both professionals and individual consumers, we’re all used to that permanent feeling of having not quite caught up yet. However, this rate of change is less familiar to the world of financial institutions and payment services, where it seems to have arrived all at once in a storm of innovation and disruption.
Naturally, this makes people nervous. It’s not just financial institutions — who, of course, are thinking hard about changes to their business models and how their clients use their services — but also technology providers, fintechs and investors. In fact, everyone faced with a decision about where to invest their time and money in making payments faster, more convenient and more secure is wondering whether change will come too fast. Or, will the returns on their investment (if any) be swamped by the unpredictability and risk they had to shoulder?
In the old days, waiting for the dust to settle was a valid strategy, but it’s not a valid strategy today. Technology moves so quickly that the dust may never settle, and in waiting, you’ll only end up further behind.
However, there’s good news, and you can see it with only a slight change of perspective. Instead of looking at the digital payment services arena from the ground level in the midst of dust clouds, climb higher and look down on it from above. What you’ll see is that the unpredictability is not universal. It’s at the edge, kicked up by an ongoing wave of innovation in device hardware, operating systems, user interfaces, near-field/contactless communication protocols, location tracking and personalization.
Compared to all that, the core is an oasis of stability. As a payment services network, Interac is the core of the Canadian digital payments ecosystem, and both our network — the “payment rails,” as we call them — and the services built on top of it have been designed to maximize interoperability and predictability. Interac e-Transfer, which millions of Canadian users and thousands of Canadian businesses rely on to move money and make payments, is based on familiar and flexible XML messaging. Interac Token Service Provider offers standards-compliant tokenization that device manufacturers reliably incorporate in their digital wallets.
They may make changes in all other areas, but the creation, storage and transmission of the token remains unchanged. We’re also upgrading our payments messaging schemas to comply with ISO 20022, the new global standard for B2B communication formats. And, we’re embarking on a new level of interoperability by making our services and platforms available to third-party developers with our open API initiative.
Underneath all these details, our basic philosophy should sound familiar. It’s a lot like the internet itself, which has evolved from green-screen terminals at universities to, well, everything we use today, with no fundamental changes to the TCP/IP protocols on which it runs. Unpredictability is what we expect from the edge, but innovation with stability is what the core is all about. And it means that as developers of services for users, you can invest your time and money knowing that at least one very important part of your solution is a safe bet.