Canada's government must work with the private sector to develop a mobile money ecosystem as part of a wider overhaul of the country's payments infrastructure that could save C$32 billion a year in productivity gains, claims a task force report commissioned by finance minister Jim Flaherty.
Following an 18 month investigation, the task force for the payments system review warns that Canada is being left behind by the EU, Bric countries and even the likes of Peru, in the transition to digital payments.
A modernised payments system could save the Canadian economy as much as two per cent of GDP in productivity gains, claims the report, as well as offer greater choice, efficiency and convenience for consumers, businesses and the government itself.
The road to modernisation is blocked because the system is currently dominated by major banks and "their interests are best served by keeping at bay new entrants to the system‚ the very entrants who would bring the innovations that Canadians need," argues the task force.
This is leaving Canadians frustrated, forced to use online bill paying services that take days to process transactions, laborious e-commerce procedures and old fashioned paper cheques.
The government must take the lead in overhauling the infrastructure, says the report, which outlines three concrete steps that can be taken:
- Politicians should work with banks, telcos, retailers and others to help create a fully rounded mobile ecosystem, enabling Canadians to use their handset as a digital wallet, combining payments, commerce and government services.
- The government should also implement electronic invoicing and payments for all of its suppliers and benefit recipients.
- Finally, the report recommends the building of a digital identification and authentication regime to underpin this modernised payments system and protect Canadians' privacy.
Flaherty has welcomed the report, promising to establish a senior-level advisory committee made up of public and private sector stakeholders that will meet regularly to discuss emerging payments system issues.
"The Government intends to continue this positive dialogue, working with key stakeholders. Together, we will help Canadians and businesses take advantage of the essential tools necessary to adopt digital payments," says the minister.
Read the report here:
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