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Fintechs Canada talks access to payment systems, open banking with Senate committee

Fintechs Canada testified as an expert witness before the Senate’s committee on banking, trade, and commerce yesterday. 

The committee was taking testimony from important stakeholders about new federal regulation that will apply to certain fintechs in payments.

Fintechs Canada welcomed the new regulation, stressing the importance of also making progress on access to payment systems and open banking. 

See our opening remarks to the committee below.

… 

Thanks for the invitation to speak about the Retail Payments Activities Act. 

My name is Alex Vronces, and I’m the executive director of Fintechs Canada. We’re a community of fintechs in payments. We advocate for policy change to promote competition and innovation in the sector.

I’d like to kick off my remarks with a quote from the Kalifa report — an independent study on the fintech sector, commissioned by the UK government.

“Fintech is not a niche within financial services. Nor is it a sub-sector. It is a permanent, technological revolution that is changing the way we do finance.” 

In the UK, fintech is a strategic priority. In Canada, we’re just getting started.

Modern payments regulation. Access to payment systems. Open banking. These are the basic building blocks of a modern financial technology sector.

The UK already has them all.

Now the UK is talking about a strategy to invest more than a billion dollars in the sector, to attract global talent, and to ensure the government, as a whole, is thinking about fintech in a more coherent and deliberate way.

Canada has some catching up to do. This starts with the first building block: modern payments regulation, which is the Retail Payment Activities Act.

We support it.

That legislation is going to help build trust in our sector.

It’s also going to pave the way to standing up the other basic building blocks. Access to payment systems. And an open banking framework that includes putting consumers not just in control of their financial data, but also their payments.

Canada may be behind, but we’re not out of the race. Another thing the Kalifa report says is that Canada is still a contender.

Canada has promising fintech stories across the country: in Vancouver, Calgary, Toronto, Montreal, St. John’s, and many places in between.

But if we don’t stand up all the basic building blocks, and soon, some of these promising stories may not have happy endings.

Modern payments regulation, by itself, isn’t enough. Without the other basic building blocks, it’s just more regulation without more opportunity to compete and innovate.

For more competition and innovation, we need open access to payment systems, which is a separate legislative initiative. We also need open banking, which is a separate legislative initiative.

Canada can catch up. Canada can have a financial sector fit for the 21st century. 

But for that to happen, we need the government to take the lead and stand up all the basic building blocks — and soon.

Thank you again for the invitation to speak here today. I’m happy to take any questions you might have.

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