“PayTechs are a catalyst to connect financial institutions with consumers in a more meaningful way” – Gary Seveny
Doug Kreviazuk:
Hello, and welcome to Fintechs Canada stakeholder insights. I’m Doug Kreviazuk, the executive director for Fintechs Canada. Today, joining me is Gary Seveny. Welcome, Gary.
Gary Seveny:
Thank you, Doug.
Doug Kreviazuk:
Gary is the board chair and executive director for Apaylo Finance Technology and the leading advocate for change in Canada’s payment system. Gary’s career in the financial services sector has spanned several benefits, almost exclusively providing executive leadership and a key market influencer as the president and CEO of Alterna Savings and Credit Union and serving in multiple roles with Payments Canada, Interac and others in Canada and in the United States. Welcome, Gary.
Gary Seveny:
Thank you, Doug.
Doug Kreviazuk:
Gary, I have a number of questions for you if you’d be so kind. Could you tell me what you see as the single largest change driver in the payments system today?
Gary Seveny:
Well, businesses really strive to provide lower cost payment solutions that are easy to use, are frictionless and are reliable. Consumers want more choices and have payment preferences often grounded in their awareness of data privacy. All this combines to create the perfect storm for innovation. To leverage cost reduction means lower margins available while offering more services to the end consumer while safeguarding their data.
Gary Seveny:
We must also continue to innovate as an industry, investing in infrastructure and leveraging relationships. This is why the notion of collaboration and impact is so meaningful to our industry.
Doug Kreviazuk:
Thank you, Gary. How have PayTech firms become a catalyst for change in other jurisdictions?
Gary Seveny:
Well, in Canada we’ve been lagging other jurisdictions, but that may, in part, be a blessing. As PayTechs succeed in other jurisdictions, the business case becomes more palatable or promising to Canadians and even to the regulators. While regulations are still pending, there has been a reasonable acceptance of PayTechs operating day to day given the trust consumers are increasingly placing in PayTechs throughout their own experiences.
Gary Seveny:
There is such a pool of talented well-intentioned individuals from our industry with amazing skills and motivation to affect change. Consumers are becoming more and more aware of the value exchange and how their financial data is collected, is used and is repurposed. PayTechs, as change agents, must continue to leverage their comparative advantages and promote collaboration across this industry.
Doug Kreviazuk:
And if I asked you, Gary, what do you see as the key difference between the current payment system participants and the emerging participants like the PayTech firms?
Gary Seveny:
Canada’s payment systems have been dominated by the chartered financial institutions, such as banks and credit unions’ cases. Additionally, the credit card corporations, Interac and Payments Canada provided proprietary standards for all payment flows. PayTechs fought very hard to not be bridled with heavy regulation and burdens that would prevent them from thriving in the payment regimes. And they have done this so throughout our current regime of payments in ways that utilize innovation. This flexibility is critical for future innovative products and services.
Doug Kreviazuk:
Speaking about what’s critical, what do you think is critical to the success of PayTech firms in Canada in providing value added services to Canadians?
Gary Seveny:
PayTechs were shunned for several years by the financial industry, until it was realized that the industry had plenty of room for additional players. Bringing new ideas that would reduce costs and provide value and convenience to the payment industry without bricks and mortar. Even prior to the current pandemic, the financial services industry was poised for further disruption. 90% of businesses prefer to message a business rather than to call or go in to see them. With the current pandemic in full swing, we now observe how Canadians want more automation, a great example of being the smarter, contactless payment solution. COVID-19 has had devastating effects on the average Canadian. It has also permitted us to reflect on the status quo and what changes must be made to ensure a more impactful future where PayTechs are a catalyst to connect financial institutions with consumers in a more meaningful way.
Doug Kreviazuk:
And finally, Gary, in your view, what changes are really needed in Canada’s payment system and when are they needed?
Gary Seveny:
The when is now. We know that the department of finance has studied the depth of the payments industry and determined PayTechs do play a valued role. Further, there has been a realization that PayTechs should become under a regulatory purview. It was also determined that the regulatory environment had to be different than that under which our FI’s are regulated. Regulatory light, as many have referred to, is not a weakening of the regulation, but a recognition that innovation should not be stymied by old rules and rigid fundamentals that may have applied decades ago, but now needed modernization.
Doug Kreviazuk:
Thank you, Gary. That’s all the time we have for today. Gary, I’d like to thank you for your time and for your keen insights and sharing that with our audience here at Fintechs Canada. For the audiences participating in listening in today, if you’d like to have more information about the association, I encourage you to look to paytechs.ca for further information. Thank you very much. And once again, Gary, thank you for your time.
Gary Seveny:
Thank you.
