Canadian banks to enter P2P market

Canadian banks to enter P2P market

Three major Canadian banks, CIBC, Scotiabank and TD Bank Financial Group have signed a letter of intent with CertaPay Inc. to offer customers the ability to make secure payments using e-mail.

CertaPay Inc. is a developer of person-to-person payments software that lets bank customers send money securely via e-mail.

"This agreement is about taking the speed and convenience of e-mail and applying it to payments," says David Marshall, vice-chairman, electronic commerce, technology and operations, CIBC. "We believe Canadians will take to e-mail payments the same way they've taken to e-mail. It's convenient, fast and secure." IDC Canada research predicts almost one million Canadians will e-mail $2.2 billion in payments within the first 12 months of availability.

CertaPay will enable banks to integrate a P2P payment capability into their existing online services, says the company. To make a payment, bank customers will access their accounts online and specify the recipient's name and e-mail address. The recipient will receive an e-mail notification instantly with directions on how to collect the payment securely and in real-time.

"Canada's financial institutions are world leaders in offering our customers the latest innovations to make it easier and more convenient to do their banking," says Albert Wahbe, CEO of e-Scotia and Scotiabank's executive vice-president of electronic banking. "At Scotiabank, we see this new e-mail service as marking a significant step forward in encouraging more Canadians than ever before to go online and try out the convenience of sending money securely using e-mail."

CertaPay's service works within the banks' existing secure infrastructure, compared to most U.S. e-mail payment services which operate outside the banking system so consumers need extra accounts, passwords and IDs to send and receive money.

Chuck Hounsell, senior vice president, TD Canada Trust, says e-mail payments expand what Web banking customers can do online. "Right now, consumers can view their accounts, transfer funds between accounts at the same bank and pay bills to businesses. With CertaPay, consumers can send money to and receive money from anyone with an e-mail address. It will be the service that encourages more Canadians to bank online," he says.

Michael Ginsberg, CertaPay's president and CEO. reports a number of international banks have expressed interest in CertaPay, and says the company intends to take its payment technology to markets outside of North America.

Scott W. Appleby, an analyst from Robertson Stephens, predicts 42 million people worldwide will e-mail P2P payments by 2005.

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