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Interac

From Wikipedia, the free encyclopedia
For the Japanese company, seeInterac (Japan).

Interac
Operating areaCanada
Members83
ATMs59,000
Founded1984;40 years ago(1984)(as Interac Association)
February 1, 2018;6 years ago(2018-02-01)(as Interac Corporation)
OwnerInterac Corporation
Websiteinterac.ca

Interacis a Canadianinterbank networkthat links financial institutions and other enterprises for the purpose of exchanging electronicfinancial transactions.Interac serves as the Canadiandebit cardsystem and the predominant funds transfer network via itse-Transferservice. There are over 59,000automated teller machinesthat can be accessed through the Interac network in Canada, and over 450,000 merchant locations accepting Interac debit payments.[citation needed]

History

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Interac Corporation
IndustryFinancial services
Predecessors
    • Interac Association
    • Acxsys Corporation
FoundedFebruary 1, 2018;6 years ago(2018-02-01)

The network was launched in 1984 through thenonprofitInterac Association,a cooperative venture between fivefinancial institutions:RBC,CIBC,Scotiabank,TD,andDesjardins;by 2010, there were over 80 member organizations. The group founded a for-profit counterpart organization, Acxsys, in 1996, which launched additional Interac-branded services includinge-transfers.Following several aborted merger attempts which were either blocked by theCompetition Bureauor by some of the co-owners between 2008 and 2013, Interac and Acxsys were combined into a single for-profit organization,Interac Corporation,on 1 February 2018.[1][2]Interac's head office is located atRoyal Bank PlazainToronto.

In 2019, Interac Corporation acquired 2Keys Corporation, Ottawa-baseddigital identityandcyber securityfor governments, financial institutions and commercial clients.[3][4]

In 2021, Interac Corporation acquired the exclusive rights to the digital ID services for Canada from the digital ID and authentication provider SecureKey Technologies Inc.[5][6]

On July 8, 2022, all Interac services were disrupted in Canada due to a nationwideRogers Communicationsnetwork outage resulting in millions of dollars in lost transactions for businesses.[7][8]On July 11, 2022, Interac stated they were adding another provider in addition to Rogers to strengthen their network redundancy.[9]

Services

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Interac is the organization responsible for the development of a national network of two shared electronic financial services:

Interac Direct Payment (IDP)

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Interac Direct Payment (IDP) is Canada's nationaldebit cardservice for purchasing of goods and services. In 1990 Interac launched a new pilot called Interac Direct Payments. Customers enter theirpersonal identification number(PIN) and the amount paid is deducted from either their chequing or savings accounts. As of 2001, the number of transactions completed via IDP has surpassed those completed using physical money.[10] Beginning in 2004, IDP purchases could also be made in the United States at merchants on theNYCEnetwork. IDP is similar in nature to theEFTPOSsystems in use in the United Kingdom, Australia and New Zealand.

Interac Direct Payment is a PIN-based system where the information entered on the PIN pad is encrypted and verified at a central server, rather than being stored on the card itself[citation needed].Because of this, it is significantly more secure than traditional signature or card-based transactions[dubious–discuss][citation needed].Despite these security features, there are ongoing fraud concerns, particularly when debit cards aredupedorskimmed— a compromisedautomated teller machineor point-of-sale terminal will record the account information contained in the magnetic strip of the card, allowing for duplicate cards to be created at a later time. The owner of the card is then secretly video taped or observed entering their PIN, allowing a criminal to use duplicate cards to make fraudulent purchases.

Interac chip cards

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In 2007, Interac announced it would be moving toEMVchip cardtechnology.[11][12]The main benefit to this technology over the existing magnetic stripes is that the chips are almost impossible to copy due to high levels of encryption.

Shared Cash Dispensing (SCD)

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Shared Cash Dispensing (SCD):cashwithdrawals from anyABMnot belonging to a cardholder's financial institution. This Canada-specific service is similar to international systems likePlusorCirrus.Virtually every ABM in Canada is on the Interac system.

Interac e-Transfer Service

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Main article:Interac e-Transfer

The Interac e-Transfer service is offered by CertaPay. It allows online banking customers to send money to anyone with an e-mail address or a cellphone number and a bank account in Canada. Prior to February 2018, this was an Interac-branded service operated byAcxsys Corporation.Interac e-Transfer service is designated as a prominent payment system and is subject to oversight by the Bank of Canada.[13]

Interac Online

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The Interac Online service allows customers to pay for goods and services over the Internet using funds directly from their bank accounts. Because no financial information is shared with the online merchant, the Interac Online service is more secure than online credit card payments. This service, operated by Acxsys Corporation from 2005-2018 and by Interac Corporation since then, was available to customers of four of the five largest Canadian banks:RBC,BMO,Scotiabank,andTD Canada Trustby 2007.

By February 2009, Interac Online was supported by roughly 300 merchants including two large universities (for tuition payments), two major wireless carriers, provincial lottery corporations, and a wide variety of retailers. It was later adopted by Paymentwall (for payments to third-party merchants) and the Canada Revenue Agency (for income tax payments).

Interac Online was anOnline Banking ePaymentsservice very similar toiDEALin the Netherlands,Giropay[14]in Germany, andSecure Vault Payments[15]in the United States.

TheOntario Lottery and Gaming Corporationhas dropped all support for Interac Online, effective 6 January 2023. According to their site, "Interac Online is being phased out by major financial institutions and will no longer be supported as a payment option for deposits."[16]

As of 2023, the service has been dropped by all major Canadian banks exceptTD Canada Trustand theFirst Nations Bank of Canada,with RBC being the latest to abandon the scheme.

A few smallcredit unionsinBritish Columbia,Ontario,New Brunswick,Nova ScotiaandNewfoundlandremain.[17]

According to theRoyal Bank of Canada,"As of January 6 2023, RBC will no longer support the option to pay for online purchases using the Interac Online Payments service. If you use Interac Online Payment service to make CRA tax payments: You will be able to make tax payments to CRA using Interac Online Payment until May 30, 2023."[18]

See also

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References

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  1. ^The Canadian Press (12 February 2010)."Bureau axes Interac request to become for-profit".CTV News.ca.Bell Media.Retrieved18 October2013.
  2. ^Bradshaw, James (5 February 2018)."Major revamp gives Interac a chance to compete against rivals".The Globe and Mail.Retrieved12 February2018.
  3. ^Bradshaw, James (5 November 2019)."Interac acquires Ottawa-based digital identity specialist 2Keys".The Globe And Mail.Retrieved4 April2022.
  4. ^"Interac Corp. acquires Ottawa-based 2Keys".5 November 2019.
  5. ^"Interac Corp. acquires exclusive rights to SecureKey digital ID services for Canada".Interac.October 2021.
  6. ^Streeter, Joe (1 October 2021)."Interac strengthens digital ID in Canada and North America with SecureKey deal".Payment Expert.Retrieved5 April2022.
  7. ^@INTERAC (8 July 2022)."Due to the continued nationwide Rogers outage of business and consumer network services, INTERAC Debit and INTERAC e-Transfer continue to be unavailable across Canada"(Tweet).Retrieved9 July2022– viaTwitter.
  8. ^"Rogers says it has started restoring service following widespread wireless outage - BNN Bloomberg".BNN.The Canadian Press.8 July 2022.Retrieved9 July2022.
  9. ^"Rogers falls as massive outage raises concerns over Shaw deal".
  10. ^Buchholz, Garth A. (22 July 2005)."INTERAC Milestones in Canada | Electronic Cash Payments: Canada Loves its Debit Cards, but Will the Cashless Revolution Happen in the U.S.?".InformIT.Pearson Education.Retrieved18 October2013.
  11. ^"What is Chip Technology | Interac".Interac.ca. 31 December 2012. Archived fromthe originalon 5 August 2012.Retrieved18 October2013.
  12. ^"Interac Association Chip Guide".EPOSS. Archived fromthe originalon 7 January 2016.Retrieved22 May2014.
  13. ^"Regulatory Oversight of Designated Clearing and Settlement Systems".
  14. ^"Home: giropay"(in German). Giropay.de. 18 September 2013.Retrieved18 October2013.
  15. ^"Fast. Easy. Secure".Secure Vault Payments.Retrieved18 October2013.
  16. ^"Interac Online Removal Details".5 December 2022.
  17. ^A prompt to select from a list of institutions appears athttps://gateway.interaconline.com/merchant_processor.doduring the checkout process. The list of credit unions on that page is badly outdated, andhttps://www.interac.ca/en/consumers/products/interac-debit/e-commerce/(which appears to be the same product, rebranded as the "Interac Debit for online payment service" ) has similar issues.
  18. ^"Shop Securely with Interac Online".

Bibliography

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