Credit unions in three Canadian provinces will be looking blue when it comes to modernizing their payments technology and platforms in a new eight-year, $100 million technology services partnership announced between 75 credit unions in Manitoba, Saskatchewan, and Alberta with IBM.
The 75 credit unions are members of the Prairie Payments Joint Venture (PPJV) of Credit Union Centrals in the three Canadian prairie provinces and the deal with IBM represents a multimillion-dollar digital transformation for the financial institutions and their customers.
“Credit unions have always been innovators,” says Michael Devlin, CEO of PPJV. “From being the first to offer debit card services, ATM banking, to mobile pay and mobile banking, we know how critical it is to move faster with our payments products and digital experience offerings.”
Payments as a Service platform plans
IBM says the multimillion-dollar technology agreement is one of the largest in Canadian credit union history.
“The dramatic movement we are seeing with payment modernization is in response to the demand from Canadians for frictionless interactions, but also better privacy, security, and speed,” says Dave McCann, managing partner for global business services at IBM Canada.
The credit unions hope the new payments technology platform and cloud services will provide members with access to the most efficient, cost-effective modernized payments processing infrastructure. This platform will also help maintain the readiness of credit unions to comply with evolving regulatory requirements at a much lower investment.
IBM’s Payments-as-a-Service platform is deployed and hosted on IBM private cloud services and is designed to meet strict regulatory requirements for financial data transmission, security, and privacy, including a real-time fraud detection capability. The platform will also enable the integration of key third-party fintech partners in solutions to help the credit unions drive rapid innovation for their members.
The IBM Payments-as-a-Service platform for the prairie credit unions is expected to begin onboarding participating credit unions by fall 2020, starting with Single-Zone Region (SZR) deployment and expanding to support Multi-Zone Regions (MZR) in the future.
Canadians are paying digitally
“Changes are happening across the payments industry, such as open banking, and companies outside the financial sector entering the market with new credit cards and cryptocurrencies. All these changes promise a new era of transparency, but also increased privacy and security challenges,” Devlin added.
Payments Canada’s annual Canadian Payments Methods and Trends Report, shows electronic payments account for 73% of all transaction volume versus cash at 21% – a 40% decrease in the past five years.
Canadian contactless payments grew 30% in 2019 reaching 4.1 billion transactions with debit cards making up 60% of contactless transactions. The report said 35% of Canadians used mobile devices for contactless payments and noted that online transfers grew substantially by 52% over the previous year.
Things are definitely looking digital in the Canadian payments sector.
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