Those “Be In The Black” Interac commercials have been creating quite a buzz in Canada lately. However, for most Canadians, paying with Interac cards is nothing new. For many years now, Canadian consumers have enjoyed the ease that comes with pulling out their debit cards to pay for their purchases. The simple automatic withdrawal of funds from their bank accounts makes shopping a breeze.
Naturally, most merchants across Canada are hip to the game and have installed POS terminals in their stores to allow for such transactions. And this practice has caught the attention of our neighbours south of the border. In fact, two years ago, Marcus Wohlsen of the Financial Post wrote that “Interac accounts for more than half of all purchases Canadians make using any card, credit or debit — about 4 billion transactions annually.”
He goes on to note that our nation’s affection for debit card use “puts Canada ahead of the U.S. in the push to create a truly cashless economy.” But did you know how Interac got its start? Wohlsen reveals that Interac began in 1984 “when five Canadian banks decided to link up their separate ATM networks…Within 10 years, Interac’s PIN-based debit system was available nationally.” By 2000, it became the preferred method of payment for Canadians!
These days, it’s pretty difficult to locate a merchant in Canada that doesn’t accept Interac. And Wohlsen points out an interesting reason as to why. “Interac only charges enough to cover its costs,” he writes, “That amounts to less than a penny per transaction, compared to several cents per transaction charged by standard for-profit systems, says Allen Wright, Interac’s vice president of product and services.”
So why hasn’t this obviously-amazing payment technique already caught on in the United States? Wright points to the fact that in the U.S., there are several regional debit networks instead of one single domestic network that covers the entire nation. As a result, Interac’s technology is far exceeding the abilities of the networks used in the States. The proof is found in Interac’s adoption of EMV technology in 2007.
What is EMV technology? EMV refers to the chip cards that are so popular today. Instead of swiping cards, customers now insert them into POS terminals in order to punch in their PIN codes. According to Wohlsen, the United States is hoping to pick up on this practice by 2015. Back in Canada, Interac has also made “contactless cards” available. This allows customers to simply scan their cards at checkouts without having to punch in their PIN codes.
So is Canada bound to become a truly cashless country? According to Wohlsen, Wright believes so – but not necessarily in his lifetime. Wright also believes that signs that Canada is heading in that direction provides a positive outlook for the nation’s economy. This is because a cash-free economy would allow for the flow of money to be easily traced – leading to greater transparency, improved decision-making and greater efficiency.
So what does this all mean for your business? Clearly, accepting Interac cards is a beneficial thing to do. If you’re not yet doing so, getting a POS terminal is an easier process than you may think. Contact Canadian POS Corporation to get all set up with a new machine within three days. Whether it’s your first one or you’d like an upgrade, Canadian POS Corporation will ensure that you’re receiving top-of-the-line equipment and unbeatable customer service.
Call us at 1-877-748-2884 today!