The document discusses the evolution of financial technology (FinTech) in Canada. It notes that while 300 FinTech companies currently operate in Canada, there are projected to be over 1,000 startups in the next five years. It also discusses the increasing adoption of exchange-traded funds (ETFs) as lower-cost investment options compared to traditional mutual funds. Specifically, it mentions that the ratio of mutual fund assets to ETF assets has dropped from 46:1 in 2006 to 13:1 as of 2016, representing a significant increase in ETF usage over that time period.

1. A sponsored feature by Mediaplanet
JUNE 2016
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Find Out How
Canadian FinTech Is
Changing Your Life
Mediaplanet Where did you
first see the need for the
online investment model?
Michael Katchen I came across
a lot of Canadians who wanted to
start investing but didn’t know
how to get started. There were two
options available at the time: do it
yourself or hire an advisor. Doing it
yourself took time and knowledge,
and working with an advisor came
at a high cost. There was an oppor-
tunity to make investing simple
and accessible to all Canadians, re-
gardless of their age or net worth.
MP What exactly can an
online investment service
offer?
MK Online investment platforms
offer many perks that have previ-
ously been inaccessible to the aver-
ageinvestor.They’reafractionofthe
cost of a traditional advisor — Can-
adians pay the highest investment
management fee in the world —
and they typically have low account
minimums.
Algorithms are built to manage
your investments so you don’t have
to, and all information is accessible
acrossvariousplatforms.And,there’s
stillahumanaspect—thereareport-
folio managers who speak to clients
when they need investment advice
orfinancialplanning.
MP Why are the investments
put into an exchange traded
fund (ETF)?
MKIbelieveinapassive,long-termap-
proach to investing.An ETF combines
the diversification of a mutual fund
with the flexibility of a stock, all with
much lower fees than mutual funds.
Investing in low-cost index funds that
track the market outperforms stock
pickingoverthelongterm.
MP What is the importance
of goal-based investing and
how does it work?
MK Goal-based investing encour-
ages our clients to invest regularly, a
good investment behaviour, and also
keeps them thinking long-term. It’s
important to know what you’re sav-
ing for and how much money to put
asidetoday,forafuturepurpose.
MP Is there competition
with traditional investment
services or only other online
investment platforms?
MK The investment industry as
a whole is going through a major
change,andcompetitionwilldevelop
amongthosewhochoosetoreact.
MP How has the online
investment platform
reduced financial stress with
respect to investments and
long-term growth?
MK People have typically associat-
ed investing with complexity,which
results in putting off saving for fu-
ture milestones. A lot of investors
are choosing this option because it’s
more transparent and the process of
signing up is simple. You can invest
your money, check on it as often as
you would like, and make time for
whatreallymattersinyourlife.
MP Do you find low fees
are important to young
professionals and beginner
to novice investors?
MK Of course — low-fees should
be important to every investor!
Most young professionals and nov-
ice investors start out with smaller
amountstoinvest.Ifalargeportionof
your money is being taken away and
paid as a commission to the advisor,
you’renotsavingtoyourfullpotential.
MP Where do you see
the investments industry
trending in the next five
years?
MK I think more regulations sur-
rounding reporting will encourage
greater transparency in the indus-
try. There will be a broader range
of options available to investors,
not strictly targeted towards high
net worth individuals. I also see a
major shift in how people invest,
and mobile will become a huge
channel. It’s exciting to see what’s
to come.
TheRapidEmergenceoftheOnlineInvestmentModel
Discussing online investing with Wealthsimple Founder & CEO Michael Katchen
“Online
investment
platforms
offer many
perks that
have been
inaccessible
to the average
investor.”
Michael Katchen
Founder & CEO

2. 2 INDUSTRYANDBUSINESS.CA
Mediaplanet What exactly is
an ETF?
Steven Hawkins An ETF is an ex-
change traded fund, which is basic-
ally an investment fund that is list-
ed on a stock exchange. ETFs are
designed to track an index, com-
modity, or a basket of underlying
assets such as equities, fixed in-
come, commodities, alternatives,
etc....Unlike mutual funds,ETFs can
be traded intraday, which means
investors can buy and sell them at
any time during a market’s trad-
ing hours, as opposed to being sub-
scribed to or redeemed once a day
following the market’s close. There
are also multi-asset ETFs, which
are ETFs of ETFs that enable invest-
ors to access a number of strategies
throughthepurchaseofasingleETF.
MP What are the main
benefits of investing in
an ETF?
SH Firstly, the management fees and
trading costs are lower. ETFs have
management fees that are substan-
tially lower than the majority of mu-
tual funds. Secondly, you can trade
ETFs on the stock exchange through-
outthetradingday,whichprovidesin-
vestors with more liquidity options.
You can also buy and sell ETF units
through brokerage accounts. Most
importantly, the sheer efficiency of
ETFs is their biggest benefit. They al-
lowamanagertomorecosteffectively
manageportfolioturnover,whichcan
leadtoincreasedtaxefficiency.
MP What is the difference
between a passively
managed ETF and an
actively managed ETF?
SH Passively managed ETFs aim to
replicateanunderlyingindex’sexpos-
ure.They are simply trying to deliver
the return of that index, typically at
the lowest cost possible.Whereas act-
ivelymanagedETFs,likemostmutual
funds, have an objective to beat the
performance of the index. They have
an active discretionary portfolio man-
ager at the helm, so there’s the pros-
pectofgeneratinghigherreturns.
MP Are these ETFs
available for all Canadians
of any level of investing
knowledge?
SH Active and passive ETFs are
available for investors of all experi-
ence levels — sophisticated, novice,
and beginner — to meet their invest-
ment objectives in a variety of mar-
ket conditions.
MP What has adoption of
ETFs been like over the past
few years?
SH The adoption level for ETFs has
dramatically increased over the last
couple of years. A lot of this is due to
thefactthatETFstypicallyhavelower
feesthanmutualfundsduetoreduced
costs associated with tracking an
underlying index or strategy. We can
clearlyseethisincreaseoverthelast10
years; where in 2006 the ratio of mu-
tualfundassetsto$1ofETFassetswas
46:1, as of March 2016, its 13:1. That’s
a huge surge over the last decade. In
termsofdollargrowth,youhavea16.7
percentgrowthofETFassetsfromDe-
cember2014toDecember2015of$76.7
billionto$89.5billion.
MP Finally, is it as easy to
buy ETFs as it is to buy
regular stocks?
SH Yes, it is. Just like a stock, each
Canadian-listed ETF has an asso-
ciated ticker symbol. You can start
buying and selling ETFs as soon as
you open an online brokerage ac-
count; it’s as simple as buying and
selling any Canadian stock.
Discussing
ETFs in
Canada
F
inTech isn’t new: it is any
financial technology that
enables people to make
transactions.Infact,there
are FinTech companies
morethan140yearsold.Todaywehave
simply adopted this term as a way to
describe companies that are challen-
ging established business models, or
offering new ones in a space the in-
cumbentsarenotoccupying.
The digital revolution has seen the
riseofthousandsofnewcompaniesthat
haveemergedbecauseconsumerswant
to leverage technology to do things dif-
ferently.MillennialsandGenZaredigit-
alnatives:theyareweanedoncomput-
ers, software, and digital devices. This
shift in consumer demographics has
triggeredthecomingchanges.
Many banks have referred to them-
selvesasfinancialtechnologycompan-
ies.But,asbanksshifttobecometechs,
companieslikeApple,Google,Amazon,
and Uber shift to become banks, or at-
tempttoreplacetheneedforthem.
The fight for the customer
During a TED talk, Uber CEO Travis
Kalanick referenced the history of in-
novation in his space, and reminded
us that Uber was actually invented in
1915, when a company called Jitney
was thriving, but was shut down by
theregulators.
Afew decades ago,financial institu-
tions provided us with a safe place to
complete transactions, but they were
in the driver’s seat as far aswhat prod-
ucts they would offer and to whom. It
was,inessence,asupply-sideeconomy.
Today the consumer has all the
power. We no longer are limited in
terms of our options. If demand for
change is not being met by the in-
cumbents, a start-up will emerge to
fill the void. Regulations are there
to protect consumers and service
providers, but if they refuse to in-
novate along with the demand,
they may get left behind — or cut
out of the equation.
Thenext10yearswillpresentmany
challenges for FinTechs, financial in-
stitutions,andconsumersalike.
Theideaofabankfailingbecameall
too real after 2008. In the rush to in-
novateandmodernize,itisnotinany-
one’s best interests to move money
fromonelargeorganizationtoanother
likeApple,Amazon,orGoogle.
Enter blockchain
Blockchain, at its most basic, is a
global database running on mil-
lions of devices and open to anyone,
in which anything of value can be
moved and stored securely and pri-
vately. Trust is established through
masscollaborationandintricatecode.
The security of blockchains relies on
trustbetweenstrangers.
The Fin+Tech Growth Syndi-
cate recently hosted a FinTech sand-
box workshop. During a discussion
about blockchain, a Gen Z attendee
stated the future of banking is that
“I never have to leave my couch.” So,
would we move from our bank if it in-
novatedtoprovideeverythingweneed
whileneverhavingtoleaveourcouch?
WhilecompanieslikeAliBaba,Goo-
gle, and Apple become banks, can
an incumbent bank start offering
non-bankingservicesandproductsto
theircustomers?
Can the regulators innovate? They
need to be pressured as much as the
financial institutions to move faster
and leverage technology. Gen Z has
told us they think we need banks be-
cause a secure alternative has not yet
been realized. Amanda Lang, anchor
of Bloomberg North and former host
of CBC’s Exchange with Amanda Lang,
stated,“Canadaneedsbanks,butCan-
adiansdonot.”
FinTech in Canada
There are 300 commercially operat-
ing FinTech companies in Canada
today. BetaKit is tracking 515 start-
ups, 67 investors, 110 co-working
spaces, 25 services, 57 accelerators,
and 7 communities. At the FinTech
Summit 2016 presented by BDC IT
Venture Fund in collaboration with
MaRS, Peter Misek predicted in
five years there will be 1,000-plus
FinTech start-ups in Canada.
From competition to
co-operation
“It’s not the institution versus the
start-upanymore;it’showtopartner,”
said J.P. Rangaswami, Chief Data Of-
ficer at Deutsche Bank.“There will al-
ways be people smarter than you.You
havetolearnhowtoengage:noneofus
canscalewithoutpartnering.”
What is likely to happen is the cre-
ation of sanctioned arenas where fi-
nancial institutions, investors, and
FinTechs can congregate to find the
right fits and test products before they
come close to the real data.The indus-
try calls this approach a sandbox.The
ideabeingthatyoubringyourtoysand
imagination to discover what you can
build together.The revolution is com-
ing—wejusthavetobepreparedforit.
The buzzword in this sector is dis-
ruption: innovators try to disrupt
the status quo in the provision of
services. But, this definition doesn’t
give the consumer enough credit.
This market is demand-driven. The
world is asking for innovation, and
the FinTechs are answering the call.
Financial institutions are running
to keep up — sometimes too slow,
and sometimes being bypassed
where regulations allow it.
The consumers are demanding it,
the innovators are creating it, the in-
vestors are bankrolling it, and the fi-
nancialinstitutionsareworkinghard
to get in the game. With the right
sandbox and a lot of collaboration,
everyonewillgetwhattheyneed.
Sue Britton
Introducing the FinTech landscape in Canada
“In 2006 the ratio of mutual fund
assets to $1 of ETF assets was 46:1,
and as of March 2016, it’s 13:1, so that’s
a huge surge over the last decade.”
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by AlphaPro Management Inc. and Horizons ETFs Management (Canada) Inc. (the“Horizons ExchangeTraded
Products”).The Horizons ExchangeTraded Products are not guaranteed, their values change frequently and past performance may not be repeated. Please read the relevant prospectus before investing.
HORIZONS TOTAL RETURN INDEX ETFS
Our benchmark ETFs provide tax-efficient, low-cost access to
the total returns of an index while minimizing tracking error.
HBB HTB HXE HXF
HXH HXS HXT
HXQ
THE FUTURE OF INDEXING
Steven Hawkins, Co-CEO and Chief Investment Officer,
Horizons ETFs Management (Canada) Inc., has over 25 years
of experience in the investment industry. After attending
the University of Toronto for Mathematics and Philosophy
in 1990, Hawkins went on to work for First Asset Investment
Management and Fairway Capital Management, before
acquiring his current position. He is known as one of the
leading innovators in Canada’s investment sector, helping
bring many ETF firsts-to-market.
Publisher: Aaron Rosin Business Developer: Jacob Weingarten Managing Director: Martin Kocandrle Production Director: Carlo Ammendolia Lead Designer: Matthew Senra Digital Content Manager Scott Dixon
Contributors: Anthony Di Iorio, Arthur Leamington, Catherine Johnston, Daryl Keating, Ken Donohue, Randi Druzin, Sandra MacGregor, Sue Britton, Ted Kritsonis Cover Photo: Mark Blinch Photo credits: All
images are from Getty Images unless otherwise credited. Send all inquiries to ca.editorial@mediaplanet.com This section was created by Mediaplanet and did not involve National Post or its editorial departments.
Please recycle after readingStay in Touch facebook.com/MediaplanetCA @MediaplanetCA @MediaplanetCA
READ MORE ON INDUSTRYANDBUSINESS.CA
Customer experience
is driving FinTech
innovation
p06
Innovation without
compromising
security
p07
Evolution of FinTech in
Canada
p12
Sue Britton
CEO & Founder,
The Fin+Tech Growth Syndicate
“Today the
consumer
has all the
power. We
no longer
are limited in
terms of our
options.”

3. 3 INDUSTRYANDBUSINESS.CA
EVOLUTION
W
hile Canadians all have
their own unique shop-
ping habits, there are
generally two things we
can all agree on: we want to save time and
we want to know our payments are secure.
While the quick and convenient tap-and-
pay method for debit or credit cards helps
consumers save time, few people may be
aware that there is an equally fastyet much
moresecurewaytomakeyourpaymentsvia
yourmobilephone.
Contactless payment
“We see a lot of consumers in Canada
using contactless transaction payments
with credit cards but not with phones,”
says Giles Sutherland, Vice President of
Strategic Alliances at Carta Worldwide,
a Canadian FinTech start-up that spe-
cializes in mobile payments in inter-
national markets. A wave of new prod-
ucts and services is expected for the
Canadian market as global innovations
start to impact the Canadian market.
“There have been attempts over the
years to introduce mobile phone pay-
ments but, for the average Canadian
mobile payment is almost non existent.”
Cell phone payments may get more
publicity with the recent launch of Apple
PayinCanada.However,accordingtoSuth-
erland, one reason for the slow adoption of
mobile phone payments may be because
many Canadians do not appreciate just
how much more secure their financial in-
formationiswiththeircellphones.
Tokenization
Thanks to tokenization (a process where
sensitive card data is replaced with a new
encrypted values) a user’s credit card in-
formation is never actually input into the
phone. “You can leave your card at home,”
explains Sutherland. “Your information
is never passed on, so those big breaches of
personal credit card information that we
hear about in the news because someone
getsholdofaconsumer’sactualcreditinfor-
mation can never happen, because a token
stops that from happening.With tokeniza-
Mobile Payments Mark a
New Evolution in Shopping
tion,you’retakingamassiveamountofpos-
siblefraudexposureoutofthesystem.”
Adam Nanjee, Head of Financial Tech-
nology, MaRS Discovery District, agrees
with Sutherland’s assessment of the sec-
urity of mobile payments. “Canada is
amongsttheworldleadersintermsofmo-
bile security, with a vibrant scene of ven-
tures and start-ups working to develop
innovation solutions in security and au-
thentication. Canada’s large financial in-
stitutions have proved more responsive
than banks in other countries to adopting
disruptive technology.”
Enhancing security
Security is further enhanced because mo-
bile phone payments can also be given
strict parameters that can limit the max-
imum amount of purchases allowed or
evenwhatkindofpaymentsarepermitted.
Further buttressing consumer security are
the safety measures designed specifically
for cell phones themselves. Unlike a con-
ventional wallet, to access a smartphone
you may need a code or fingerprint or even
facial recognition. “A mobile phone offers
multiple layers of authentication. Pay-
mentsusingthismethodareexponentially
moresecure,”insistsSutherland.“Toaddto
that, there are even studies that show you
can go for hours without realizing you’ve
lost your wallet, but you will notice you’ve
lostyoursmartphonewithinminutes.”
Mobilepaymentsdon’tjustofferusersbet-
tersecurity;theyalsoallowforenhancedus-
erexperiences.Forexample,atyourlocalcof-
feeshopyoucouldplaceandpayforanorder
throughanapponyourphonesothatbythe
timeyouactuallygettothestoreyoujustpop
inandpickupyourcoffeewithoutwaitingin
line. Or you could get a ping on your phone
as you walk by your favourite store that will
let you know there is a sale on your favour-
ite item. Sutherland points out that mobile
phones will dramatically enhance the way
consumers collect and use rewards, loyalty
points,coupons,orgiftcards,andtheconven-
ience of electronic receipts means you don’t
havetoworryaboutlosingapieceofpaper.
According to Nanjee, mobile payments
are the way of the future. “User experience
is paramount in the mobile world – it only
takesonebadexperienceforaconsumerto
switch. People expect seamless products,
and Canadian banks, PayPal and Apple
Pay have been designing solutions that
have built confidence in mobile payments
among Canadians. We are seeing growth
in the number of contactless and mobile
payments month over month.” Sutherland
is equally as enthusiastic. “Mobile pay-
ments will give businesses and consumers
a whole new way to meaningfully inter-
act. They will help consumers shop smart-
er and drive sales for merchants. Targeted,
value-added services are one of the most
excitingfeaturesofmobilepayments.They
arereallygoingtoshakethingsup.”
Sandra MacGregor
“...there are even studies that show
you can go for hours without
realizing you’ve lost your wallet, but
you will notice you’ve lost your
smartphone within minutes.”

4. 4 INDUSTRYANDBUSINESS.CA
GENRE CATEGORY
Y
ou may have
never heard of
FinTech, but it’s
already start-
ing to reshape
the financial
services indus-
try. At its most basic, FinTech is
about companies leveraging tech-
nology to make financial services
more efficient. Traditionally con-
servative in nature and dominated
by large banks, the financial servi-
ces industry was ripe for new ideas
and innovation. FinTech compan-
ies recognize the opportunity to re-
invent the financial services indus-
try through disruption. Consumers
and businesses are already bene-
fitting from disruptions to how we
bank, invest, and transfer money —
and will continue to do so.
FinTech shouldn’t be thought of
as an after thought or alternative
to the status quo, but rather as an-
other option. Crowdsourcing and
money transfers are two exam-
ples that are being re-envisioned
by innovators in the FinTech sec-
tor, making it easier to do busi-
ness and at a lower cost. Because
FinTech companies are typically
small and nimble, they can innov-
ate and adapt in ways large com-
panies can’t.
Collaboration brings out
the best
Behind this growth of innovation
in financial services is something
equally innovative — FinTech clus-
ters. These hubs of like-minded
companies are designed to help
start-ups get access to investment,
product feedback, sales oppor-
tunities, and advice from indus-
try leaders. Last year, Toronto’s
MaRS FinTech Cluster was estab-
lished to help bring the next gen-
eration of tech to the financial ser-
vices industry. Paycase, a mobile
money-transferring start-up, cred-
its the cluster concept for help-
ing it and others get established.
“The FinTech cluster gives start-up
companies access to major finan-
cial companies to create amazing
solutions,” says Joseph Weinberg,
co-founder and CEO of Paycase.
“Small companies with great ideas
also gain credibility with lend-
ers and investors by being part of
these collaborative clusters.”
Credibility and trust are import-
ant in the financial services indus-
try, and consumers and investors
want to know there is a strong team
behind the idea.
Weinberg has discovered pock-
ets of innovation across the coun-
try and finds it rewarding to ad-
vance FinTech in Canada. “It’s easy
to find your competition and com-
plimentary companies,” he says.
“The possibilities are endless, and
the next decade will be one revolu-
tionized by innovation.”
Ken Donohue
Why FinTech Matters and How It Can
Help Businesses and Consumers
Mediaplanet So, you’re
the co-founder of an HR
technology company, but
what does HR have to do
with FinTech?
Elijah Moore HR certainly doesn’t
come to mind when most people
think of FinTech. But when you look
at the major systems that the HR
function is built upon — like group
insurance, payroll and group retire-
ment management — you start to see
that financial technology is actually
atthecentreoftheHRuniverse.
MP What is happening at
the intersection of HR and
FinTech that is interesting to
you?
EM What’s happening is a new
tech-centric business model is en-
abling startup companies to funda-
mentally change a big, established
market. Disruption is an over-used
term, but what is happening is mar-
ket disruption in its truest sense.
The markets for payroll, insur-
ance and HR management are col-
liding, which is causing a funda-
mental shift in the way businesses
are buying HR services and group fi-
nancial products. New US compan-
ies like Zenefits, Gusto, Namely and
Maxwell Health are making it hard
for established HR, payroll, and
group benefits providers to compete
using business models that have
worked for the last 30 years.
New technologies and innovative
revenue models have allowed start-
ups to provide amazing HR prod-
ucts for businesses at a very low cost.
These new products make it easier
andcheaperforbusinessestomanage
HR and provide benefits for their em-
ployees. This is great for businesses
because their administrative burden
is reduced, and it’s great for employ-
ees because their access to healthcare
throughcompany-sponsoredbenefits
isimproved.
We started Collage in order to
lead this type of change for the Can-
adian market. We set out to re-in-
vent the way Canadian businesses
manage HR and group benefits, and
along the way we think we have the
opportunity to build the future dis-
tribution model for group financial
products as well.
MP Collage is focused on HR
and group insurance, but
what other opportunities
for innovation exist in the
insurance space more
broadly?
EM The insurance industry has
been a victim of stagnation for the
last 50 years, but we have arrived at
a point where start-ups and tech-
nology are starting to accelerate
progress in an industry that needed
an outside push.
The insurance industry is really
not built to innovate. At its core, in-
surance is about pricing risk — and
the lower the risk the better. Most
insurance products are underwrit-
ten by an insurance carrier and then
sold or distributed by a broker. Nei-
ther insurance carriers nor brokers
are well positioned to implement
new technologies. Add in the fact
that insurance is highly regulated,
capital intensive and profitable in
its current state,and you can under-
stand why technology has been a
bit slow to infiltrate the insurance
value chain.
Over the last few years, the insur-
ance tech financing markets have
been really heating up, specifically
in the US. There are some awesome
new companies doing some inter-
esting things across the entire in-
surance ecosystem.
Big data is a common thread
among new insurance tech start-
ups. If you really think about it, in-
surance underwriting is one of the
original applications of big data in
human history. In this vein I think
that there are huge opportunities
when it comes to improving how
insurers make use of data – both
in terms of collecting new data
through wearable or mobile tech-
nologies, and through analyzing
these new data in order to make risk
pricing more fair and accurate.
I’m also intrigued by the creation
of entirely new, tech-driven insurers
like Oscar Health in the U.S.Starting a
new insurance carrier is difficult, and
it requires a lot of capital; however, I
think if properly executed the start-
up insurance carrier can be a power-
fulforceforchangeinthetraditionally
conservativeinsuranceindustry.
MP How is Canada doing?
EM We are lucky as Canadians to
have access to an amazing finan-
cial system. However, we are un-
doubtedly slower to innovate than
our U.S. counterparts. This slower
pace is a common thread across fi-
nancial technology as a whole, but
it runs doubly true for insurance.
There just haven’t been a lot of com-
panies that have managed to push
insurance tech forward in the Can-
adian market.
It is going to take a coordinated ef-
fort in order to fix this gap in innov-
ation. Entrepreneurs need to take
initiative, providers of capital need
to open their wallets, and insurance
carriers need to be co-operative and
open to newways of doing business.
Canadianinsurancetechmaybein
itsinfancy,butweareextremelyexci-
tedaboutthefutureofourmarket.
“Thepossibilities
areendless,and
thenextdecade
willbeone
revolutionizedby
innovation.”
Collage is a Toronto-based company on a mission to make
premium HR technology free and accessible to every
Canadian business. Learn from one of the founders how
FinTech is revolutionizing the HR and insurance ecosystem.
Financial Technology Is Causing An
HR REVOLUTION
Joseph Weinberg, CEO & co-founder of Paycase. Photo: Submitted
Elijah Moore (left) and the co-Founders of Collage. Photo: Submitted
“Disruption is an over-used term,
but what is happening is market
disruption in its truest sense.”
INNOVATION

5. MEDIAPLANET 5
SECURITY
S
ince the 2008 global crisis,
the financial services indus-
try has been undergoing a sea
change. Public confidence in
the sector remains low, and
emerging technologies promise to upend
legacy institutions, including payments,
lending,andcapitalmarkets.
A digital revolution is underway. Innov-
ative new technologies are changing the
industry. One technology in particular is
leading this transformation. It’s called the
blockchain, and it promises to be the most
disruptiveforcesincetheinternet.
This new internet technology has the
ability to create units of digital informa-
tion that cannot be duplicated. The most
famous example is the digital curren-
cy Bitcoin, but the blockchain can also
make other types of digital records that are
incorruptible.The result is a new era of the
internet, one that allows users to transmit
unitsofvaluealongwithinformation.
Blockchains have the potential to de-
crease the relevance of traditional fi-
nance. At the same time, the technology
allows legacy firms to create new revenue
models while lowering costs by auto-
mating manual processes. Because of
the risks — and the opportunities — that
come with this new technology, banks,
exchanges, and other financial institu-
tions are currently evaluating the impact
it will have on their business.
For existing firms, the stakes could not
behigher.Companiesthatcomeoutontop
willhavebuiltafoundationfortheirfuture
success — along with having the satisfac-
tion of leading a once-in-a-lifetime trans-
formation for their industry. Meanwhile,
organizations that fail to actwill potential-
ly lose their core business to competitors
whohavetakenstepstoharnessthepower
ofblockchaintechnology.
Risks and rewards
Recognizing the risks and potentials of the
blockchain, Silicon Valley and Wall Street
are actively studying the technology.Insti-
tutions around the world, including banks
The Blockchain Is
Transforming Finance
A new way of doing business is here.
(J.P. Morgan and Barclays) and exchanges
(The TMX Group, Nasdaq, and the London
Stock Exchange), are working intensively
to develop an appropriate blockchain strat-
egy, one that will allow them to keep pace
with FinTech start-ups and, at the same
time,make use of the technology to secure
anadvantageovertheirpeers.
The blockchain’s ability to create value
and authenticate information adds a new
layer of functionality to the web. Already,
users are able to perform transactions dir-
ectly with one another — in 2016, Bitcoin
transactions averaged over $200,000 USD
perday.Aswell,theunbundlingoftradition-
al finance institutions is creating a wide
range of new business opportunities. Near-
ly $23 billion of venture capital and growth
equityhasbeeninvestedintheemergingin-
dustry of FinTech (finance plus technology)
over the past fiveyears.Beyond finance,the
blockchain promises to create new and as
yetunimaginedwaysofdoingbusiness.
Theblockchainimprovesglobalcommuni-
cations by speeding up online interactions
and lowering the costs associated with in-
formationexchange.Justasemailandcloud
computingreplacedtheiranalogequivalents
and altered daily life,blockchain technology
promisestohaveanequallytransformation-
alimpact.Corporationswillbeforcedtoadapt
as blockchain innovations compete directly
with banks, stock exchanges, and other in-
cumbentfinancialinstitutions.
Plausible use cases for this technol-
ogy that are already close to being imple-
mented revolve around the automation
of financial services and processes, al-
lowing traditional businesses to replace
aging back-end systems and radically im-
prove efficiency. Many incumbents rec-
ognize they have the scale of resources
needed — in terms of employee base and
institutional knowledge — for gaining a
foothold in this new economy. Beyond fi-
nance, blockchains promise to bring sig-
nificant change to everything from the
energy, health, and legal sectors, to iden-
tity and personal data management sys-
tems, and the sharing economy.
Anthony Di Iorio
“Organizations
that fail to act
will potentially
lose their core
business to
competitors
who have taken
steps to harness
the power of
blockchain
technology.”
Anthony Di Iorio
WILL BE FELT IN THE FOLLOWING INDUSTRIES
AS PART OF THE FINTECH REVOLUTION.
CORPORATE FINANCE
CAPITAL MARKETS
LEGAL CONTRACTS
TRADE FINANCE
SCIENTIFIC DATA RESEARCH
INSURANCE CONTRACTS
PAYMENTS
CLEARING AND SETTLEMENTS
SUPPLY CHAIN AUDITING
MICROGRID ENERGY REDISTRIBUTION
FILE SHARING
IDENTITY MANAGEMENT
CROWDSOURCED VENTURE CAPITAL
INTELLECTUAL PROPERTY PROTECTION
PEER-TO-PEER SHARING ECONOMIES
PROPERTY TITLE REGISTRATION
ASSET TRADING

6. 6 INDUSTRYANDBUSINESS.CA
There are paymenT
processors and
paymenT innovaTors.
ic1409 0616 ©2016, paymentech, LLc. all rights reserved.
You can count on Chase Paymentech to handle your day-to-day payment
processing needs while our innovation, advice and solutions can help take your
business to the next level. As a part of JPMorgan Chase, a global financial innovator,
we are helping shape the future of how businesses accept payments in Canada.
Find out more: 1.877.552.5519 | chasepaymentech.ca
PAYMENTS
T
he modern world is an
ever-evolving maze of innov-
ationsandnewdevelopments.
Technologies that seemed im-
possible a few short years ago
are now commonplace,meaning that every
system—includingtheCanadianpayments
ecosystem — needs to evolve commensur-
ately in order to stay fast, transparent and,
aboveall,relevant.Thisfactishighlightedin
arecentstudyfromtheCanadianPayments
Association(CPA).
Canada’s payment needs
Along with technological advancements
comes an evolution of expectations from
consumers and businesses who now need
service providers to support flexible and
secure payment experiences.According to
the recent CPA study, businesses have ex-
pressed a clear desire for near real-time,
data-richpaymentsandtoreceivenotifica-
tions that describe payment status, as well
as being able to initiate and receive pay-
ments around the clock. Though Canada’s
paymentsystemsarecurrentlylargelyout-
dated, investments are being made in the
payments infrastructure that will make
fundsavailableinlessthanaminute.
According to Sam Jawad, President of
Chase Paymentech Canada and Emerging
Markets, this type of convenience, coupled
with simplicity, is the way forward. “Pay-
ment incumbents need to look beyond
basic payment processing to value-added
services for merchants and their custom-
ers — that is the only way to support sus-
tainable premiums. People happily pay for
services, such as Netflix and Spotify, be-
cause it’s clear they add value proportional
totheirsimpleandstraightforwardcosts.”
Payment Experiences
How we pay for goods and services has
rapidly changed over the last few years,
mainly due to the substantial increase in
smartphone ownership in Canada as well
as the rise in mobile banking. The CPA
study found that approximately 70 per-
cent of Canadians use smartphones,while
almost 35 percent reported using mobile
The Rapid Evolution of
Payments in Canada
banking in the last year. In addition, 48
percent of Canadians are now using on-
line banking as their primary method of
billpayment,allofwhichispushingevery-
daypaymentexperiencestowardstheelec-
tronic realm.While increased online activ-
ity means merchants need to adapt to im-
pending changes, there’s solace in the fact
certain companies are poised to get these
businesses ready for the changing land-
scape ahead — catalyzing the ultimate aim
ofdrivingsalesintheprocess.
“The goal of every merchant is to drive
sales, and acquirers exist to facilitate these
sales,” added Jawad. “Merchants and ac-
quirerscaninnovatetomakethecommerce
processsmootherforconsumersbymaking
payment an invisible part of the act of buy-
ing, which should improve conversion and
directlyfeedthemerchant’sbottomline.”
Modernization and convenience
As part of the study, the CPA has evaluated
modernizationinothercountriesinorderto
provide insight into Canada’s payment fu-
ture. Though there are numerous success-
ful implementations of payments systems
fromaroundtheglobe,theprevailingfactors
are establishing a new, faster system, rath-
er than upgrading existing infrastructure
and incorporating support for ISO 20022,
whichisbecomingtheglobalmessagestan-
dard.Theseinnovationsarealsofilteringin-
to the corporateworld,as digital companies
like Google, Amazon, and PayPal, to name
a few, are introducing inventive payment
products,suchasdigitalwallets,in-apppay-
ments, and app-based virtual banks. This
progression means cash is quickly becom-
ing a relic of the past, something blatant-
ly reflected in the statistics. Cash now rep-
resents only 43 percent of the total trans-
actions at point of sale, having declined 17
percentoverthepastsixyears.Thisnumber
is set to drop even further in coming years,
astheintroductionofnewproductsandser-
viceswilllikelyacceleratethemovetowards
evenmoreelectronicpayments.
The future is a digital world, as dictated
by consumer’s desires. This digital inevi-
tably needs to be backed up by forward-
thinking merchants, willing to adapt to
the new landscape. The concept of click of
a button is at the forefront of almost eve-
ry digital company now, but behind that
concept lies the burgeoning world of Fin-
Techinordertomaketheone-clickconve-
nience as secure as possible.
Daryl Keating
Payment incumbents
need to look beyond
basic payment
processing to value-
added services for
merchants and their
end customers.

7. MEDIAPLANET 7
The rise of FinTech as a bubbling
category portends an intriguing
future where consumers will
have a more seamless experi-
ence in how they choose to pay for things,
andsecuritywillfigureprominentlywith-
in that experience.
Security is vitally important for both
consumers and merchants, who are each
keen on protecting themselves, but al-
so for solution providers who need to be
compliant with a complex regulatory en-
vironment.
News headlines are generally focused
on the most egregious examples of cyber
theft and consumer fraud, where com-
promised accounts and data can lead to
serious repercussions. Improving the
overall payment experience, while main-
taining the security behind each trans-
action, will grow in importance with the
rise of FinTech.
Near Field Communication (NFC) has
been a standard feature in many smart-
phones for the last few years, and beyond
just being a simplerway to pairwith Blue-
tooth devices, it is becoming a key bridge
for mobile payments.
Biometrics, like fingerprint or retina
scans, may offer new ways to make pay-
ments that would also be difficult for
criminals to exploit. It’s estimated 50
percent of smartphones will come with
a fingerprint scanner by 2019. Other sec-
urity solutions have included tempor-
ary card numbers and various encryption
methods to protect transactions and data
from being stolen. However, these solu-
tions haven’tyet proven to be bulletproof.
For some insight into the options
FinTech companies have in countering
such threats, Suzan Denoncourt, Man-
aging Director, Canada, for Ingenico
Group, and Richard Giannini, SVP Prod-
uct Development, Canada, also of Ingen-
ico Group, offer their perspective on some
common myths.
FinTechSecurityWillHelp
FosterInnovation,SayExperts
The continuing growth of FinTech is poised to further modernize the financial
system, though security will figure prominently on how safe that process is.
MYTH Innovation naturally
compromises security.
FACT “In the case of payments, incum-
bents are accustomed to working within
theparametersestablishedbycompliance
authorities and thereby build out, and are
reputed for secure solutions. With secur-
ity at the forefront, innovation may be
limited by the rules of engagement if they
are perceived as too confining or an ob-
stacle.Bycontrast,FinTechstart-upshave
the luxury of focusing on creativity first,
thereby allowing for rapid development
of innovative approaches to improving
customer experience. Their contribution
is, in many cases, the ability to fast-track
ideas into valuable solutions. Because
commercialization and mass adoption
of new solutions inevitably requires ad-
herence to established payment secur-
ity guidelines, innovation must be prov-
en to not compromise security — either
the solution will need to be tweaked or
the rules may evolve to address a new use
case/implementation.The marriage of in-
cumbents and start-ups has shown itself
to be a means by which to enable that bal-
ance between innovation and security,
thus the trend we have been seeing in the
Canadian payments industry.”
Suzan Denoncourt, Managing
Director, Canada, Ingenico Group
MYTH NFC payments have
become so popular with the
emergence of smartphones and
customers’ willingness to use
their phones.
FACT “In Canada, the proliferation of
NFC payment acceptance actually pre-
datestheuseofsmartphonesforpayment.
The contactless payments ecosystem was
driven by vendors who elected to provide
contactless capability as a standard pay-
ment terminal feature several years ago,
while card issuers were increasingly in-
cludingcontactlesswithCHIPcards.With
contactless payment acceptance already
in place in the country, smartphone users
have enjoyed widespread use of their de-
vicesatthevastmajorityofpointsofsale.”
Richard Giannini, SVP Product
Development, Canada,
Ingenico Group
RegtechHasBecome
aCrucialPillarof
FinancialTechnology
GLOBAL IDENTITY VERIFICATION
Turning the future
of payments into
today’s reality
Transforming an advertising screen into a multi-merchant point-of-sale, creating a
marketplace of value-added services that can run on payment terminals, and integrating
secure payment acceptance into mobile devices – these are just some of the latest
FinTech innovations that are transforming the way merchants and consumers interact.
Ingenico Group is a driving force behind each one of these new technologies.
Through our strong ecosystem of innovation partners, we’re accelerating the
development and delivery of seamless and secure payment solutions that are creating
new sales opportunities for merchants and revolutionizing the consumer journey.
Contact us today to learn more.
CanadaFintech@ingenico.com
The financial sector adheres to strict
regulations, including the FinTech
companies changing the world of finance,
but the technology handling regulatory
compliance is also adapting.
BetterknownasRegTech,regulation
technologyisemergingasameanstohandle
thedataandsecuritythatmakedealingwith
financessosensitiveinthedigitalera.Organizing
datathroughanalyticswithidentificationand
authorityisimportantforanyfinancialentity,
andFinTechcompaniesarenoexception.
By managing more and more data, FinTech
companies require tools to ensure compliance
with greater agility and credibility.As they
evolve their own technologies, RegTech has
done the same, forging an unlikely situation
where various sides of the equation are
working closer together.
“RegTech brings together unlikely partners
— banks,regulators,and technology firms — to
create solutions thatwill benefit the financial
services industry as awhole,” says Jon Jones,
president atTrulioo.“It’s only through
collaboration that financial institutions can
achieve reliable,cost-effective compliance
while regulators can ensure that regulatory
control is being managed effectively.”
Thisdoesmarkasignificantshiftforall
involved,becauselegacysystemshavelong
managedcompliancefromadistance.RegTech
canhaveamoreimmediateimpact,withbasic
tasksthatreduceoperationalrisksinmeeting
complianceandreportingobligations.
It could also help FinTech reorient
more resources and focus on security and
risk mitigation,which is critical when
identification and authority need to be
protected from being compromised.
“RegTech offers an opportunity to
repurpose compliance teams, offering the
opportunity to automate typically mundane
but burdensome tasks and allowing them
instead to establish a renewed focus on
risk mitigation,” he says. “The goal is to
continue to remove hurdles that would
hinder FinTech’s contribution to creating
an enhanced, fair, and resilient financial
system — from this perspective RegTech is
an innovation enabler.”
Ted Kritsonis
Read more from RegTech on
industryandbusiness.ca
By Ted Kritsonis

8. 8 INDUSTRYANDBUSINESS.CA
For decades, Canadians
have been hauling around
wallets bursting at the
seams with everything
from credit cards to library
cards, coupons, and even
pictures of their family
pets. But, those days are
numbered thanks to a
major digital innovation in
the financial sector, namely
the mobile wallet.
This virtual billfold can store much
oftheinformationfoundinaphysic-
al wallet, ranging from loyalty cards
to concert tickets and retailer cou-
pons. It can also store credit card,
debit card and banking information,
which means it can be used to make
purchases.
Agolf enthusiast,for example,can
pick up the perfect 5-iron at a sport-
ing goods store and pay for it with
their credit card by swiping their
smartphone over a payment termin-
al or by having the merchant scan
a bar code on the smartphone, de-
pending on the kind of mobilewallet
they’re using.
Forthistransactiontohappen,the
phone and the payment terminal
have to be specially outfitted, which
many are.
Security fears unfounded
In making a purchase with a digital
wallet, sensitive information passes
through the smartphone’s hardware
and operating system, a special pay-
ment app and finally the source of
funds,which is often a bank.
Understandably, this process
could lead to consumer concern over
privacy and security around finan-
cial transactions.
But,expertssaythosefearsareun-
founded. “The truth is that mobile
wallets leverage a variety of secure
technologies and the devices them-
selvesareequippedwithbuilt-insec-
urity features such as the secure ele-
ment and biometric sensors,” says
Rob Cameron, Chief Product Offi-
cer of Moneris Solutions, a proces-
sor and acquirer of debit and credit
cardpayments.“Duetoidentityveri-
fication tools, even theft of your de-
vice means you are protected from
fraudsters making purchases with
your phone since they cannot forge
or counterfeit a fingerprint.”
Mindful of security concerns,
banks have developed a system in
which clients, when they activate
a mobile wallet, connect to a cloud.
There, the bank verifies the client’s
credentials and issues an electron-
ic token that effectively authorizes
small purchases.The client’s private
information is stored on the bank’s
secure data servers but not on the
mobile device.
The more Canadians know about
all these safeguards, the more likely
they will be to adopt mobile wallets;
in a recent study conducted by Mon-
eris, of those respondents who had
never used a mobile wallet, 62 per-
cent said they would be more likely
to do so if they knew itwas secure.
Consumer apprehension not-
withstanding, mobile wallets have
been gaining traction as banks and
trust companies, credit card com-
panies, wireless providers, retailers,
andotherslookatbuildingtheirown
mobilewallets.
Apple Pay, one of the mobile wal-
lets that contains cards from a var-
ietyofissuers,launchedinCanadain
October 2014 and has partneredwith
several financial institutions includ-
ing major Canadian banks.
Cameron reports that one-fourth
of all transactions Moneris process-
es today are via contactless cards or
devices.
Cashing out
The more Canadians use mobile
wallets the less they will use cash.
Even now, many of them rarely buy
anything with cash. And, although
we don’t need cash for most of what
we do these days, experts feel cash
will never be taken out of the mix
completely.
“I often challenge myself not to
carry cash and use the RBC wal-
let and mobile app for payments
and e-transfers,” says Linda Man-
tia, Royal Bank’s Executive Vice
President of Digital, Payments and
Cards. “It’s amazing how far you
can get going cashless but there are
still instances that really do require
cash, like giving your kids a few dol-
lars here or there or giving someone
a tip. I don’t see how cash could be
eliminated entirely.”
Still, like so many others in the fi-
nance sector, Mantia expects the fu-
ture to look much different when
it comes to financial transactions.
Look no further than Uber, the
on-demand car service,she says.
Its users provide their payment
information when they register for
the service, they order a car using a
smartphone app and, when the ride
is over, fare payment is completed
automatically through the billing in-
formation on file.
“Imagine if paying for everything
was as easy as that,” says Mantia.
“When you look at the Uber model, you
begin to see what is possible.”
Randi Druzin
I
f you’ve seen the movie, Her,
in which a man develops a re-
lationship with an intelligent
computer operating system,
and thought it was pure sci-
ence fiction,think again.
In the near future,humanswill be
having lengthy conversations with
virtual assistants about a variety of
subjects,including their finances.
Indeed, Canada’s big financial in-
stitutions are focusing on innova-
tion that will make banking sim-
pler and easily integrated into your
daily life.
The end of passwords and
security questions
With banks embracing biometrics,
whichisthemeasurementofunique
physical characteristics for the pur-
pose ofverifying identity,you’ll soon
be able to do your banking without
using passwords or answering sec-
urity questions.
Following a successful pilot pro-
ject last year, one of Canada’s major
banks has introduced technology
that canverify a client’s identity in a
matter of seconds based on the char-
acteristics of theirvoice.
When clients contact the bank,
their voice print is matched to their
live voice in natural conversation.
This technology means they do
not have to memorize and repeat a
specific phrase, which is the case
with manyvoice biometric systems.
“Werealizethetypicalverification
process can sometimes seem like
a series of skill-testing questions,”
says Claude DeMone, Vice-Presi-
dent, Business Enablement, RBC.
“Thisnewtechnologysimplifiesthis
process significantly.”
In the not-so-distant future, you
could be using nothing more than
your voice to access accounts to pay
bills and transfer money.
Financial Fitbits
Going a step further, when con-
tactingthebank,youcouldbehaving
human-likeconversationwithbots.
Advancements in artificial intel-
ligence have led to the introduc-
tion of applications that perform
automated tasks such as making
dinner reservations, giving weath-
er updates, and conducting online
searches.
With financial institutions
searching for ways to deliver value
inthedigitalsphere,botswillbepro-
viding customers with information
about accounts, loans, and other
banking matters.
They could be offering specific
products to customers and helping
them make decisions that will help
them reach their financial goals.
Linda Mantia, Royal Bank’s
Executive Vice President of Digit-
al, Payments and Cards, sees a fu-
ture in which artificial intelligence
powered smart bots leverage data
and client insights to help custom-
ers lead healthier financial lives,
the way Fitbit now tracks users’
physical activities to help them be-
come fit.
Rob Cameron, Chief Product Offi-
cer, Moneris Solutions, a processor
and acquirer of debit and credit card
payments, says digital voice recog-
nition assistants like Siri are con-
stantly improving. “Right now we
can ask for the score in the Toronto
Blue Jays game. Soon, we’ll be able
to ask for two tickets for the game
tonight and have them charged to
ourVisa — and do so using our voice
as authentication.”
Mantia emphasizes that “sec-
urity is fundamental to the trust
we’ve builtwith clients,and it must
underpin all these technologic-
al advancements. Customers trust
banks with their financial informa-
tion,and securitywill always be the
number one priority for the pay-
ments industry,” she says.
Enhanced security
On that front, some financial insti-
tutions are turning their attention
to blockchain technology,a large de-
centralizedledgerthatrecordstrans-
actions and stores the information
on a global network where it can-
not be tampered with. Blockchain
is widely known as the technology
underpinning the bitcoin digital
currency.
Facingchallengesindatamanage-
mentandsecurity,banksarelooking
at ways this technology can be used
in cross-border payments, capital
markets,and other applications.
Mantia says there is the potential
for blockchain to fundamentally
change how the financial services
industry operates, but the size and
scope of that change is still being
understood — there will no doubt
be a significant shift as the technol-
ogy is used in test cases, but it’s ear-
ly days still.
With a focus and commitment to
security assured, all Canadians will
be free to venture into the brave new
digital world without reservations.
This technology that is new today
willsoonbemainstreamandwillbe
expected by customers looking for
enhanced digital interaction with
their bank provider.
Randi Druzin
Digital Technology Makes Virtual Wallets
a New Reality
“Security is fundamental
to the trust we’ve built
with clients.”
62%OF CANADIANS WOULD BE
WILLING TO USE A DIGITAL WALLET IF
THEY KNEW IT WAS SECURE.
ONE IN FOUROF ALL
TRANSACTIONS TODAY ARE VIA
CONTACTLESS CARDS OR DEVICES†
.
†
Based on transactions processed by Moneris
Innovations Poised to Make
Banking Easier, Better
Rob Cameron, Chief Product Officer,
Moneris Solutions

9. ‡
Let’s Make Someday Happen™
Creating a Better Everyday
RBC product innovations have built a foundation that will continue to make mobile
banking simpler, more flexible, and more secure. It’s an honour to be recognized
globally for our achievements, but there’s still work to be done as we continually
strive to create a better everyday for our clients.
RBC wins Best
Payment Innovation
® / ™
Trademark(s) of Royal Bank of Canada. RBCand Royal Bank are registered trademarks of Royal Bank of Canada. RBCWallet and RBCOnline Banking are operated by Royal Bank ofCanada. ‡
All other trademarks are the property of their respective owner(s) and used with permission.

10. 10 INDUSTRYANDBUSINESS.CA
You don’t need to go far
for an adventure
Canadians are lucky, the
great outdoors is always
pretty close by. Why not
explore more of your own
neighbourhood, city, or
province? Activities like hik-
ing and visiting local parks
are low cost and lots of
fun, and you don’t have to
worry about exchange rates,
foreign currency or lost
luggage.
Canadians can now pay with a simple tap of their Apple devices, improving both ease of transaction and transaction security.
I
t’s a fact, Canadians have al-
ways been great adopters of
technology, and they simply
love using their debit cards.
Didyou know that 83 percent
of mobile users have a smart-
phone, and that 63 percent of them
use it to conduct mobile banking? On
top of that, Interac debit is the most
preferred payment method in Can-
ada, with 53 percent of transactions
occurring over the Interac network
in 2015. The evolution of debit onto
mobile platforms is a natural move
for Interac, and now Canadians can
choose to pay using Interac with
theirAppledevices.
Consumers with Interac deb-
it cards issued by all five of Canada’s
major banks (BMO Financial Group,
CIBC, RBC, Scotiabank, and TD) can
now add their cards to Apple Pay
on eligible devices. With Canadians
using Interac an average of 16-mil-
lion times daily to pay and exchange
money, Interac on Apple Pay is sig-
nificant for the early adoption of mo-
bilepayments.
“Our goal is to develop products
that add consumer convenience
while ensuring the safety and sec-
urity of their money,” said Avinash
Chidambaram,Vice President, Prod-
uct and Platform Development,
Interac Association and Acxsys Cor-
poration. “Choosing mobile pay-
ments means Canadian consumers
don’t have to open up their purse or
wallet to pay.They can instead reach
for their mobile device and remain
protected by strong security features
and the Interac zero customer liabil-
ity policy”. Soon Canadians will also
be able to choose Interac for In-App
payments, further simplifying the
online shopping experience and pro-
viding yet another way to use your
ownmoneywhenmakingpurchases.
To use Interac with Apple Pay, con-
sumers must first add their debit card
to their Apple Wallet. Once this pro-
cess is complete, paying with your
Apple device is simple: just hold your
iPhone or Apple Watch on top of the
contactless payment terminal with
your finger held on Touch ID and the
transaction is complete. Apple Pay
works with the iPhone SE, iPhone
6s, iPhone 6s Plus, iPhone 6, iPhone
6 Plus, and Apple Watch, and can be
used anywhere contactless payments
are already accepted, which is literal-
lyhundredsofthousandsoflocations.
A key part of this new payment
technology is the Interac Token Ser-
vice Provider (TSP) service, which
protects consumers from crimin-
al activities and fraud. Tokenization
means that each Apple Pay trans-
action is validated with a one-time
unique token that is specific to your
deviceandcannotbereused.Thecon-
cept of substituting consumers’ fi-
nancial information with a “token”
has been integral to the security of
Interac products. For example, the
number on the front of an Interac
debit card is simply an identifier and
notanaccountnumber,whichispart
of the reason why the Interac net-
work has such low fraud numbers.
The TSP was developed in collabora-
tion with IBM, a world leader in mo-
bile and cloud computing, Bell ID, a
global provider of tokenization soft-
ware for mobile payments, and Ever-
link, a leading provider of integrated
paymentsolutionsandservices.
Withstronginfrastructurelikecon-
tactlessterminalsalreadyprevalentto
support mobile payments, Canadians
will surely be pulling out their smart
phones with increasing frequency to
makeeverydaypurchases.
Arthur Leamington
A LEAP FORWARD FOR MOBILE
PAYMENTS IN CANADA
Plan for summer fun
There are probably a number
of things you’re looking for-
ward to this summer, perhaps
a music festival, road trip, or
guests from out of town. Be
sure to build these highlights
into your budget so you can
stay on track with your finan-
cial goals and enjoy the mo-
ment as well.
Simplify Your Summer Spending
“Our goal is
to develop
products that
add consumer
convenience
while ensuring
the safety and
security of their
money.”
INSIGHT
COMMERCIAL FEATURE
Remember your
shopping list
Hosting picnics or backyard
barbeques is a great way to
enjoy summer weather with
friends and family while
staying on a budget. Plan
your menu, make your gro-
cery list, and, most import-
antly, stick to it.
Don’t let cash get between
you and loved ones
Skip the hassles of withdrawing
cash or writing a cheque and
use Interac e-Transfer instead.
Interac e-Transfer is the smart,
secure way to send your own
money directly to another
person using online or mo-
bile banking, and can be con-
ducted anytime, anywhere. It’s
a great way to pay back friends
or family for group purchases,
or to be reimbursed if you’re
the one paying up front.
Travel light
Heading out for a bike ride
or a stroll down the street?
With Interac now available on
Apple Pay, you can add your
debit card to your Apple Wal-
let and pack a little lighter. It’s
the newest way to you can
pay with your own money,
helping you stick to your
summer budget.
Warmer days are finally here and data from Interac Association shows that Canadians spend more money during the summer
months than at any other time of year, particularly around long weekends. To make the most of the season (and your dollars)
Interac offers five tips you can try without breaking a sweat.
By Arthur Leamington

11. Add your Interac debit card to
Apple Pay and pay with your own money.
Interac Debit.
Now on Apple Pay.
Interac and the Interac logo are registered trade-marks of Interac Inc. Used under license.

12. 12 INDUSTRYANDBUSINESS.CA
F
inancialtechnology,orFin-
Tech, is one of the hottest
tech trends of 2016, with
start-ups entering the bur-
geoning category to help modernize
bits and pieces of the financial system
fortoday’sconnectedconsumers.
Canada is currently home to 80
FinTech companies, most of which
are based in Toronto,Waterloo, Ont.,
and Vancouver. An Ernst and Young
survey found 8.2 percent of digital-
ly active Canadian consumers have
used at least two FinTech products
within the last six months, in the
form of money transfers and pay-
ments,andsavingsandinvestments.
Compared to the 15.5 percent of
global consumers using those same
products, it would seem Canada lags
behind, but the country’s FinTech
companiesseempoisedtospurfaster
adoptionwithinthenext12months.
Solving a friction
FinTech start-ups and established
firms have sprouted up, aiming to
add value-added services and access
to capital for those who need it, like
providing loans to small businesses
that have cash flow challenges and
may not have access to traditional
bank financing, for example. Mobile
peer-to-peer payments and sending
money internationally to family or
business vendors around the world
havebeengrowinginpopularity.
“It’s about not always focusing on
disrupting or challenging traditional
business financial systems, but rather
focusing on solving a friction in a cur-
rentprocess,”saysAlexanderPeh,Head
of Mobile and Market Development at
PayPalCanada.“Ifyoucanfindanarea
wherepeoplearefrustratedwithagap
in the financial system that isn’t ser-
vicing them, then FinTech companies
cancomeinandfillthose.”
Thinkingglobally,beyondjustCana-
da,isacrucialcomponenttoachieving
that,headds.Anotherfocalpointiscol-
laboration,notonlywithpartners,but
also incubators and other established
playersintheFinTechecosystem.
“To be successful in this industry,
it’s important for FinTech start-ups
to truly understand which regula-
tionsapplytothem,andwhichregu-
lations apply at the various stages of
growth,” he says. “Being a start-up,
it’s hard enough to be discovered, so
it’s important to have a robust mar-
keting strategy. Knowing the cost of
acquiring a new customer, market
using cost-effective channels,custo-
mer engagement — and then once
it’s almost at that stage, how to re-
tain those customers.”
Businesses build,
consumers win
Founders and entrepreneurs tend
to have a few different avenues with
which to steer their companies. So-
me maywant to build long-term sus-
tainable companies.Others may pre-
fer to partner with incumbents, in-
cluding major banks, to build their
customer base. Or the ultimate goal
maybetobeacquiredbyalargerfirm.
The launch of development labs in
Canadahasbeenafirststepinestablish
ing the kind of support seen in oth-
er international FinTech hubs. Banks
and other financial institutions have
increased their involvement to foster
innovation as well. Peh believes regu-
latory bodies could gain from the en-
hancedtransparency,openingofdata,
and economic gains if they are able to
leverage the technology and balance
riskswithdevelopingtheFinTecheco-
system.
“The major winners will be finan-
cial service companies that embrace
technology and look for opportun-
ities to leverage it to enhance or ex-
pand their private offering,” he says.
“The losers will be those who fail to
draw on new technologies to better
serve their customers, or don’t in-
novate in a way that puts their cus-
tomers and their needs first.”
Ted Kritsonis
INNOVATIVE TECHNOLOGY
FinTech is a growing trend in Canada as start-ups
and established companies move to shake up
and innovate the financial system.
FinTech in Canada
Ready to Rise
“The major winners will be
financial service companies
that embrace technology.” Alexander Peh
Head of Mobile and Market
Development,
PayPal Canada
1STD+H is the first payments vendor to apply distributed ledger blockchain technology to a global payment
services hub. Financial institutions using D+H’s payments hub will now be able to utilize a secure, closed
loop distributed ledger system to connect bank networks, move money in real time and improve access
to liquidity. Peer-to-peer payments can be made in real time, benefitting from the anonymity inherent in
blockchain technology to ensure security and reduce risk.
The blockchain solution was built as an extension of D+H’s global payments solution, which helps financial institutions
of all sizes manage all payment types – including high value, mass and immediate payments – and all currencies in one
integrated system, domestically and across borders. This milestone demonstrates that D+H’s payments technology is
adaptable to blockchain and can integrate blockchain to meet evolving peer-to-peer client payment needs…
…JUST ONE MORE REASON WHY MARKET-LEADING
TECHNOLOGY MATTERS.
Learn more at dh.com
dh.com
Lending Payments Core Channels
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