Cross Border eCommerce Navigating the Canadian Waters

CNP EXPO 2014 | GRAD SCHOOL | 19TH OF MAY

Ish Nabhan, VP of Sales Canada, Payvision

Warren Lusk, Product and Business Development Manager, PSI Gate/ Hometrust

Canadian CNP Market

The CNP market in Canada offers companies in the Payment chain a fantastic opportunity with intriguing challenges.

An evolving market with new technologies, products and services makes a local resource with the right contacts and with the right understanding of the Canadian market paramount.

Lets take a look at few of the current topics in the CNP space:

1. Code of Conduct

2. Visa Debit - Interac Debit Online

3. Mobile payments

Code of Conduct

In 2010, the Canadian government released a code of conduct for the Credit and Debit Card Industry in Canada.

(see Credit and Debit Industry –Code of Conduct)

The purpose of the code was to demonstrate the Industry’s commitment to transparency and choice.

These specific policy elements (rule 1., 3., 10) will provide the CNP market an opportunity for the following:

Code of Conduct

Transparency

(1.) Increased Transparency and Disclosure by Payment Card Networks and Acquirers to Merchants 

Displaying effective merchant discount rate for each type of payment card from a payment card network

Displaying interchange rates and, if applicable, all other rates charged to the merchants by the acquirer

Outlining the number and volume of transactions for each type of payment transaction

Outlining the total amount of fees applicable to each rate

Outlining the details of each fee and to which payment card network they relate to

Code of Conduct

CHOICE:

(3.) Payment card network rules will ensure that merchants will receive a minimum of 90 days notice of any fee increases or the introduction of a new fee related to any credit or debit card transactions. Payment card networks will provide at least 90 days notice to acquirers for rate and / or fee changes and at least 180 days notice for structural changes

(10.) Payment card network rules will ensure that negative option acceptance is not allowed.(Must opt-into Visa Debit)

Debit : Visa Debit Facts

Launched in Canada January 2011 with +30,000 merchants enabledSeveral million cards and growing across 3 issuers, 4th expected in

Summer 2014Participating merchants have seen an average 32% increase in Canadian

Visa Debit transactions vs. non-participating merchants in a previous campaign, per Visa

Challenges:Requires gateways to filter debit for those that do not wish to acceptMasterCard announced expected cards market 2015Included in Code of Conduct; Merchant must opt-inHigher cost compared to Interac: % vs. cents per transaction

Debit: Interac Online

Independent Member Institution with a closed loop system.Debit card issued by member banksPrimary accepted form of CP transaction with heavy penetrationIn CP environments, Interac is the preferred method of payment,

however, challenges exist for CNP market

Challenges:Online experience creates negative adoptionEMV only solution means limited Mobile penetration

Mobile Payments

Being able to process payments via your mobile payments device allows merchants to accept payments anytime, anywhere.Ideal solution for micro to small merchants looking for a mobile solutionIdeal solution for specific vertical industries

o Maintenance, Service trades, trade shows, tour operators/excursions,

Roughly, 8-10 different mobile payments providers in market with flat fee pricing to $ volume pricing

Challenges:Credit only, mag stripe transactionsNo current practical EMV (Interac) solution (Cost, market demand)Visa Debit is pushed to Debit as E-com

Thank you!E-mail: i.Nabhan@payvision.com; warren.lusk@psigate.com