Toronto-based FinTech startup Wealthsimple announced it secured provisional approval to join Interac’s e-transfer service, becoming the first participant under its expanded access guidelines.
Previously, only federally regulated banks or provincially regulated credit unions could take part. Now, the FinTech startup will join the network of over 280 financial institutions that enable users to send, request, and receive money for both personal and business accounts with the service.
This move comes more than two years after Wealthsimple launched its own peer-to-peer payments service called Wealthsimple Cash. Among other features, the app also allows users to send, receive, and request money.
In a statement to BetaKit, Wealthsimple noted that Interac e-transfer is how many of its clients choose to move money, and the company had been indirectly accessing a limited version of the system by paying fees to a banking partner. Wealthsimple said it can now offer clients higher transfer limits and fast settlement times through its direct participation in the system.
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“Our new status as a participant on Interac’s e-Transfer system is game-changing,” Hanna Zaidi, chief compliance officer for payments at Wealthsimple, told BetaKit. “It means we can offer our clients a better experience when moving their money, which are important factors when making investment decisions. As well as explore new products and innovations.”
The expanded access guidelines now allow organizations that are both FINTRAC-regulated Money Service Businesses (MSBs) and investment dealers regulated by the Canadian Investment Regulatory Organization (CIRO) to apply and make Interac e-transfer available to their customers.
“Financial services are evolving, and an increasing number of Canadians are using innovative new offerings,” said Interac president and CEO Jeremy Wilmot. “By extending our trusted product and platform to new organizations, while maintaining high security standards, we will allow Canadian consumers and businesses to confidently transact in new ways.”
On Elevate’s FinTech stage, which was programmed by BetaKit, Zaidi expressed her satisfaction with a deal that “allows for greater connectivity for users,” but noted that Canada “still needs a real-time rail (RTR) system.”
“In order for us to have a really robust financial services system, we need to have multiple options,” Zaidi said. “I see the real-time rail as high-speed, broadband internet. Our current system is like dial-up internet.”
First promised for delivery in 2022, Canada’s RTR payments system has seen multiple delays, and is currently under another review by Payments Canada. The up-and-coming payment infrastructure is meant to facilitate the instant processing of payments and eliminate the need for settling periods. Interac was selected by Payments Canada to be RTR’s exchange solution provider. Canada is the only G7 country without a RTR payments system.
Interac says to join the e-transfer service under its expanded requirements, eligible financial institutions must undergo a rigorous application process and meet all the same requirements and obligations as existing participants.
The post Wealthsimple to join Interac e-transfer system under expanded access guidelines first appeared on BetaKit.
Originally published on BetaKit : Original article