Doug Kreviazuk, Executive Director, Fintechs Canada, May 11, 2020
For much of the past decade, Canada has been pondering the notion of providing a real time payments system so that payments could flow immediately, securely and with certainty. During these discussions, many critical use cases were identified for consumers, businesses and government in order that the investment could be justified. During these deliberations, the implications associated with a pandemic were not central to the key considerations. However, given our current circumstances, there isn’t likely any use case more important than the need to deliver money into the hands of those in deep despair due to an emergency, or affected by this current pandemic.
Traditionally, an emergency is defined as an unexpected, serious and often dangerous situation requiring immediate action. Emergency relief, similarly, is viewed as the immediate provision of essential needs to individuals, families and communities in the aftermath of an emergency. The challenge is that the Canadian government and Canada’s payments ecosystem is challenged in addressing this need in a timely fashion.
In a recent speech by Canada’s Prime Minister, Justin Trudeau, he advised Canadians that “if you chose direct deposit [to receive government relief benefits] you’ll get the first payment within 3-5 days … and if you choose to receive your benefit by mail [cheque], you’ll get money within the next 10 days.” In a national emergency, are these timelines acceptable? No, not today with the number of payments-related developments around the globe. It is puzzling to understand why can’t Canada leverage recent global learnings, incentivize innovation and adopt innovative thinking to help combat the financial implications of regional or national emergencies?
It has been suggested that approximately half of all Canadian households have reported lost work due to Covid-19. Unfortunately, the sector hardest hit includes women and younger workers–those least able to weather this financial storm. The combination of these realities is that many Canadians and families will incur a funding shortfall which could be devastating to them. Despite the government’s generous promises of aid to Canadians and businesses, delivering this funding quickly and safely remains elusive.
Similar to many other countries, Canada was not prepared to address the financial needs associated with a pandemic. The fact that Canada continues to support and rely on a paper-based chequing system is almost indefensible. While there may be those questioning the security of electronic payments, the real risk to providing emergency relief is the potential for fraud or counterfeit cheque risk. The real possibility exists that sophisticated criminals are attacking our weakest point in the payments system: cheques and cheque verifications to ensure they are authentic. This vulnerability can only be appropriately addressed once Canada fully realizes the immediate and future benefits of moving to a completely electronic environment and properly serving the public’s interest.
When designing and implementing our nation’s critical infrastructure, like the payments system, we must consider all use cases, contemplate the public policy implications of these developments and the criticality of rapid deployment. In 2020, we should not simply accept a 3-5 day or possibly a 10 day delay in securing emergency relief nor the fact that paper cheques remain a primary form of payment. Instead, our goal should be “safe and instantaneous” and continuously evolving until our payment-related needs are being met. If not, ask why not?
