Oh Canada, left behind in digital payments David Gustin - June 16, 2014 8:05 AM | Categories: Trade Credit Commentary | Tags: Canada, digitial payments Twenty-seven European Union countries, the BRIC countries‚ even Peru and Romania‚ are significantly outpacing Canada’s transition to digital payments, with obvious negative implications for Canada’s global competitiveness and interoperability according to a Canadian Task Force for the Payments System Review put together by the Department of Finance. This is shameful quite frankly. We are talking about a payment system that has not evolved with the times. B2B options for einvoicing are, should we say, fairly non existent. Small businesses are frustrated by the lack of digital alternatives to paper cheques. Eighty per cent of small business payments are made by cheque because there is no accessible, reasonably priced electronic payment alternative. The Canadian banking system is dominated by a few large banks (six lenders combine financial assets worth five times GDP) that do not have to innovate, and vendors have focused on faster growth markets. The Task Force pointed out that these banks stymie innovation to protect their own interests. One of the challenges in Canada is that like Australia, it is a resource rich country with some very large Government organizations (Wheat Board, etc.) and large foreign multinationals (working the Oil Patch) and a few large home grown non resource Canadian companies (Bombardier, BlackBerry). There really is not the big middle market like in the states. Typically, you are either really big, or what banks would call SMEs – under $50 million in revenue. There is not much in between like there is in the USA. Perhaps Canada is resting on its laurels like The Economist recently pointed out in "Maple, resting on laurels". While perhaps being lucky during the Great Recession in terms of the banking crisis, luck does not work when innovation, leadership and are required ingredients. The Task Force concluded that there are many things that need to be done. They suggest to: • Implement electronic invoicing and payments (EIP)for all government suppliers and benefit recipients; • Partner with the private sector to create a mobile ecosystem; • Propel the build of a digital identification and authentication (DIA) regime to underpin a modernized payments system and protect Canadians’ privacy; • Pass legislation to define a discrete payments industry and create a public oversight body to ensure effective governance of the industry; While Taulia held a recent webinar with Telus touting their success in replacing Xign (yes the Telecoms are pretty cash rich these days) there has been little else in the way of any noteworthy news. The second point from the task force about partnering is a good suggestion – but who will take action on the Canadian side? Related Articles Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of new posts by email.