Do you know if the US or Canada will consider taking a Unified Payments Interface approach at all? It seems like it really worked for India, although I'm not super caught up on the specifics. I'm also not sure that Visa and Mastercard could exist in their current forms under a UPI regime, so perhaps they would need to be nationalized in the process?
Though it’s not going to be quite like India's UPI, Canada’s anticipated real-time rail (being built by Payments Canada) is going to connect all the bank accounts in the country and let people send and receive money in real-time. It’s also going to be interoperable with Interac e-Transfer for Business, which, IIRC, is a different product from the version of e-Transfer most Canadians are used to. This new system is supposed to have more open access, so fintech companies will be able access it to send and receive money, but this hinges on the government amending federal legislation that currently prohibits fintech companies from accessing the systems. I also wonder what this will mean for the likes of Visa and Mastercard. If I had to guess, I see them continuing to exist as separate networks alongside Payments Canada’s real-time rail. Account to account transfers may not be so substitutable with credit card payments. At the same time, however, Visa Direct and Mastercard Send—their other payment products—could benefit from the extra account coverage they’d get through Payments Canada’s real-time rail. Why do you think they would need to be nationalized?
Sorry for the delay here, this is super interesting. I guess I thought one outcome would be nationalization of those companies since I wasn’t too sure how the credit card networks would operate in UPI-like world, although I’m reading that credit cards are now trying to get access to the UPI rails in India (https://techcrunch.com/2022/06/07/upi-credit-cards-india/). Makes sense what you are saying though that they could co-exist and even benefit from the extra coverage through a national payments rail!
Do you know if the US or Canada will consider taking a Unified Payments Interface approach at all? It seems like it really worked for India, although I'm not super caught up on the specifics. I'm also not sure that Visa and Mastercard could exist in their current forms under a UPI regime, so perhaps they would need to be nationalized in the process?
I have no idea! But I have asked AlexV to share some thoughts.
Though it’s not going to be quite like India's UPI, Canada’s anticipated real-time rail (being built by Payments Canada) is going to connect all the bank accounts in the country and let people send and receive money in real-time. It’s also going to be interoperable with Interac e-Transfer for Business, which, IIRC, is a different product from the version of e-Transfer most Canadians are used to. This new system is supposed to have more open access, so fintech companies will be able access it to send and receive money, but this hinges on the government amending federal legislation that currently prohibits fintech companies from accessing the systems. I also wonder what this will mean for the likes of Visa and Mastercard. If I had to guess, I see them continuing to exist as separate networks alongside Payments Canada’s real-time rail. Account to account transfers may not be so substitutable with credit card payments. At the same time, however, Visa Direct and Mastercard Send—their other payment products—could benefit from the extra account coverage they’d get through Payments Canada’s real-time rail. Why do you think they would need to be nationalized?
Sorry for the delay here, this is super interesting. I guess I thought one outcome would be nationalization of those companies since I wasn’t too sure how the credit card networks would operate in UPI-like world, although I’m reading that credit cards are now trying to get access to the UPI rails in India (https://techcrunch.com/2022/06/07/upi-credit-cards-india/). Makes sense what you are saying though that they could co-exist and even benefit from the extra coverage through a national payments rail!