Powering Connections in Canada - 2020 Corporate Year in Review - Interac
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2020 Corporate Year in Review Powering Connections in Canada
Inside Our 2020 Corporate
Year in Review
Message from the President and CEO________________________________________________________________________________________ 4
Message from the Chair of the Board ________________________________________________________________________________________ 5
Overview of Interac Corp. and Corporate Governance ________________________________________________________________ 7
Strategy and Corporate Performance________________________________________________________________________________________ 18
Strategy 1: Pave the Way for Rapid Commercialization Through a Unified Interac Digital Platform ________________________ 30
Strategy 2: Lay the Foundation for New Lines of Business ____________________________________________________________________ 32
Strategy 3: Build on Leading Position in Canadian Payments________________________________________________________________ 34
Strategy 4: Seek a Leadership Role in Digital ID to Grow our Business _______________________________________________________ 38
People and Community_______________________________________________________________________________________________________ 42
Diversity & Inclusion____________________________________________________________________________________________________________ 48
INTERAC 2020 CORPORATE YEAR IN REVIEW 2 3
CORPORATE MESSAGE
Message from the President and CEO Message from the Chair of the Board
The year 2020 was certainly a Chief among them at Interac Corp. is The continued acceleration of digital None of our successes this year Equity and Empowerment initiative To describe 2020 as a year requiring control and flexibility for consumers and greater
the importance of resilience. With payments and our internal efforts would have been possible without the to combat racism and discrimination clarity for our financial institution partners. Working
year like no other. The COVID-19 strength and resilience is an enormous
millions of Canadians depending on yielded tremendous success for Interac resilience and perseverance of our within our walls and in our communities. collaboratively with leadership, we further achieved
pandemic stretched health care Interac solutions every day, we worked this year. We saw record usage of workforce. Throughout the challenges understatement. Not all businesses could critical success goals by creating an Innovation
systems, disrupted economies, quickly to maintain business continuity, Interac e-Transfer and more than of 2020, the well-being of our Although COVID-19 continues to manage in the face of such uncertainty, Committee and completing pivotal strategy work
and uprooted businesses across network stability, and security at the half of Canadians (53 per cent) used employees remained a top priority. present profound challenges and and I was impressed to see Interac display related to the mid-term and long-term journey
onset of and throughout the pandemic. Interac Debit in apps and websites We expanded mental health resources uncertainties, I am confident Interac has of Interac to futureproof the business.
the globe. It challenged both during what was an extraordinary
Like many organizations we had to more frequently during the pandemic. and implemented programs to keep the right strategy, team, partnerships,
humanity in unexpected ways. immediately transition all (450+) of our our employees connected during times and support in place to grow now and
year in Canada and beyond. The results of those decisions reflect the careful,
There is no question the employees to work from home. In doing We also continued our efforts to of isolation. And, as the reality of into the future. I thank and applaud sound, and strategic path paved by the Interac
impacts of this pandemic are so, we put their safety and well-being architect a future where Interac is a remote work emphasized the necessity our employees for their incredible The business and social implications of COVID-19 executive team to respond to the pandemic,
at the forefront of every business trusted digital value exchange in for a strong workplace culture, we contributions during this difficult year. presented immense hardship, but guided by its support customers and employees, provide value to
far reaching, as are its lessons.
decision to ensure they had the support Canada. This year marked our first continued our cultural transformation I am also grateful to our Board purpose, values, and forward-looking vision, Interac shareholders, and ultimately solidify the company’s
needed to keep our networks and full year of operations alongside our journey, engaging employees across all and shareholders for their invaluable successfully navigated a challenging year and role as a trusted and reliable leader at the forefront
services running smoothly. subsidiary, 2Keys Corporation, levels of the organization to define and counsel and continued support. delivered for its customers, employees, partners, of digital innovation in Canada.
since acquiring the national security design the Interac culture they desire. 2020 was indeed a year of many and shareholders. The organization’s commitment
Maintaining network stability and company in November 2019. Together lessons, but one of the biggest was the to success and its long-term growth strategy On behalf of the Board of Directors, I would like
business continuity also meant thinking we demonstrated our digital ID A key focus of our cultural evolution this immeasurable value of our team in a period of unexpected change was also to extend a thank-you to Chief Executive,
strategically about how to advance capabilities and raised awareness of year was on inclusivity and equitability working together to innovate for the a testament to existing governing practices that Mark O’Connell, and his leadership team for their
our business priorities to support an the role we could play in a Canadian in our organization’s internal and future while supporting the millions were further strengthened throughout the year. dedication and resilience in an incredibly difficult
increasingly digital world. That involved digital ID framework – the need for external operations. We witnessed the of Canadians who rely on our services time. This was my first year as Chair of the Board,
continued efforts to consolidate and which was accentuated this year. I am health and economic impacts of the each and every day. I am immensely Among the careful management decisions and it was a year that starkly reaffirmed the need
modernize our technology to advance confident that those efforts, bolstered pandemic as they disproportionately proud of what we accomplished in required to support Canadian consumers and for continued innovation. I am optimistic in our
the interoperability of our platforms by our scalable technology platforms affected vulnerable populations, this challenging year and am looking businesses, 2020 also brought the expiration of united and committed efforts to advance the way
while also making investments to enable and solutions, solidify our leading as well as the ugly realities of systemic ahead at our continued efforts to the Consent Order for Interac marking the official Canadians exchange value in the digital economy
new lines of business in the future. position in the Canadian payments racism. That spurred meaningful empower Canadians to transact end to its restructuring journey. This new chapter today, and far into the future.
ecosystem and successfully set us up and much needed reflection by our digitally with confidence. signals the opportunity for further growth and
As consumers’ purchasing behaviours for long-term sustainable growth. leadership and employees on what it diversification of product offerings for Canadians Thank you,
dramatically shifted to digital options, means to be anti-racist allies. At Interac, Thank you, alongside a continued commitment to operate
we expanded our digital solutions – it means that being a champion a low-cost business model.
from making Interac® Debit contactless of equality and empowerment is an
and eCommerce payments more ongoing effort, but also crucial to In a year that demanded quick and strategic
demonstrating how we are an employer Paul Vessey,
accessible to enhancing our Interac Mark O’Connell decision-making by executive management and Chair of the Interac Corp.
e-Transfer ® Bulk solution – giving of choice and an excellent corporate President and Chief Executive Officer the Board, we were pleased to consult on and Board of Directors,
Canadians more control and flexibility. citizen. This year, we launched a new Interac Corp. support operational changes that enabled more Independent Director
4 5
Overview of Interac
and Corporate Governance
One of Canada’s most trusted
financial services brands.
INTERAC 2020 CORPORATE YEAR IN REVIEW 6 7
OVERVIEW OF INTERAC CORP
Who We Are
Interac Corp. empowers Canadians to As a leader in digital security and To maintain our leadership
authentication alongside our subsidiary, in the payments landscape,
transact digitally with confidence by 2Keys Corporation, security is the core
we are focused on:
providing payment and value exchange of everything we do. 2Keys Corporation
is a national leader in research,
services rooted in security, reliability, policy, operations and technology • Operating secure, reliable and
and efficiency. for digital identity and cyber security. efficient shared platforms and
solutions
Our state-of-the-art privacy, fraud
mitigation and governance expertise
ensure we help keep Canadians • Leading innovation that enhances
safe and secure when transacting value and relevance to customers
with Interac.
• Competing globally at industry
standards
We deliver value to our shareholders
by leveraging shared, scalable
technology platforms, investing in our
business priorities and driving strategic
growth that enhances our customers’
relationships with their clients. We
have strong relationships with partners
across the payment ecosystem,
from financial institutions, tech giants
and fintechs to payment solutions
providers and merchants. Because of
where we sit in the payment ecosystem,
collaborating and connecting with
partners, platforms and people is how
we succeed.
INTERAC 2020 CORPORATE YEAR IN REVIEW 8 9
OVERVIEW OF INTERAC CORP.
Our Products Interac Debit enables consumers to make
payments for everyday purchases using funds
directly from their bank account, operating
Interac e-Transfer is a digital money transfer
service to instantly send, request and receive
money securely in Canada. First launched
and Solutions on a good funds model. The merchant has
real-time access to funds with no risk of
in 2003, the service has grown to be an essential
and ubiquitous service for Canadians.
chargebacks and acceptance is a lower cost
compared to other networks. Since the first • Autodeposit and Request Money features
debit cards were introduced in 1994, the debit were launched in 2017, which enhanced the
Canadians choose Interac solution has evolved to include a number of user exper ience and opened new use cases
offerings, including eCommerce. for small and micro businesses.
products and solutions an
average of 18 million times • Cross-Border enables Canadians to use • Interac e-Transfer Bulk allows businesses
their debit card at two million retailers in the to manage payments to and from multiple
a day to pay and exchange United States recipients quickly and safely.
money. In 2020, $489B was
• Cash withdrawals are available anywhere in • International remittances are available
moved across more than Canada from Automated Banking Machines through collaborations with Mastercard and
6.5B transactions on the (ABMs) displaying the Interac logo Western Union.
Interac network. • Contactless payments enable customers to Interac has business capabilities to meet the
transact using a debit card or OEM (original demands of the modern payments’ ecosystem
equipment manufacturer) mobile wallet and real-time needs of the market. We have
designed to make everyday purchases quick, world-class security, privacy, fraud mitigation
secure and convenient for customers and governance expertise, and we help
keep Canadian customers safe and secure
• eCommerce payments enable customers 24/7/365 when transacting online.
to pay with their own funds online or in their
mobile apps
INTERAC 2020 CORPORATE YEAR IN REVIEW 10 11
CORPORATE GOVERNANCE
Interac Executive Interac Board of Interac appointed Paul Vessey as the new Chair of the Board in 2020.
Paul served as an Independent Director on the Interac Board since 2018 Board
Committee Directors Committees
and brings 40 years of experience in the financial industry, including
Chief Operating Officer at Visa USA Inc. His experience leading a global
payments technology company has been a dynamic force as Interac
solidifies its leadership role in the way Canadians exchange value.
A brand-new Innovation Governance Committee
Board Committee was William G. McEwan
(Committee Chair)
created in 2020 to examine Ian Burns
the future of Interac and Yann Jodoin
the role we can play in Frank Psoras
Executive Lead: Kikelomo Lawal
payments modernization.
This committee helps the
HR and Compensation Committee
Interac Board of Directors Sean Amato-Gauci
provide strategic insight (Committee Chair)
into how Interac prioritizes Lisa Swiderski
Sophie Forest
initiatives such as digital ID David Clanachan
in Canada and the creation Executive Lead: Caroline Stephens
Mark O’Connell, Linda Drysdale, Debbie Gamble, William Keliehor, Paul Vessey, Sharon Haward-Laird,* Sean Amato-Gauci, Sophie Forest, Yann Jodoin,* William G. McEwan, Mark O’Connell, of an Open Banking
President and CEO Chief Financial Officer Chief Officer, Chief Commercial Chair of the Board, Vice-Chair of the Board, Royal Bank of Canada Independent Director Fédération des caisses Independent Director Interac Corp.
Innovation Labs & Officer Independent Director Bank of Montreal *Replaced Angela Strange as Desjardins du Québec payments system. Risk Committee
New Ventures *Departed the Board January 2021.
Independent Director in
*Replaced Patrice Dagenais in
John Cowan
September 2020
Replaced by Derek Vernon. June 2020 (Committee Chair)
Anya Schnoor
Sean Amato-Gauci
Paul Vessey
Independent Committee Executive Lead: Linda Drysdale
David Clanachan
(Committee Chair)
Paul Vessey Innovation Committee
Mark O’Connell Sharon Haward-Laird
William G. McEwan (Committee Chair)
Sophie Forest Anya Schnoor
Executive Lead: Kikelomo Lawal Sophie Forest
John Cowan
Ian Burns
Finance and Audit Committee Executive Lead: Debbie Gamble
Yann Jodoin
(Committee Chair)
Frank Psoras Advisory Committee
Kikelomo Lawal *, John Scott, Caroline Stephens, Peter Sweers, Ian Burns, 189286 David Clanachan, John Cowan,* Frank Psoras, Anya Schnoor,* Lisa Swiderski, Lisa Swiderski David Clanachan
Chief Legal Officer, Chief Executive Chief Human Chief Technology & Canada Inc. o/a Independent Director Canadian Imperial The Toronto-Dominion The Bank of National Bank William G. McEwan (Committee Chair)
Ombudsman, Officer, 2Keys Resources Officer Operations Officer CUCC Bank of Commerce Bank Nova Scotia of Canada Executive Lead: Linda Drysdale Executive Lead: William Keliehor
Corporate Secretary Corporation *Departed the Board January 2021. *Departed the Board October 2020.
Replaced by David Gillespie. Replaced by D’Arcy McDonald.
*Departed Interac October 2020
INTERAC 2020 CORPORATE YEAR IN REVIEW 12 13
CORPORATE GOVERNANCE
A Well-Governed Interac In early-2020, Interac held its second Annual
General Meeting with special guest Masai Ujiri.
“
Corporate governance at Interac is Corporate Governance Shareholder Relations:
Framework:
comprised of practices and principles that As Interac Corp. is not publicly traded,
contribute to our trusted reputation in the • Implementing effective policies, Shareholder Relations is focused on
financial services sector. To maintain the programs, and mechanisms timely transparent communication and
active shareholder engagement.
If you want to stand out, and you
corporate stability that drives our business, • Working in collaboration with our
Our shareholders played a critical
want to make an example for
Interac relies on a matrix of interconnected Board of Directors and Management
to ensure the company operates role on projects in 2020 that open the youth, and for the future of
functions that address market needs and
challenges, while ensuring our shareholders
and participants are informed and governed
ethically and responsibly
• Maintaining open lines of
communication
new doors for Interac, including the
acquisition of 2Keys Corporation,
a national leader in research, policy,
operations and technology for
to push the envelope.
“
whatever we’re doing, you have
digital identity and cyber security,
effectively. Our corporate governance • Providing comprehensive reporting and MintCo, an organization started
— Masai Ujiri
policies, procedures and programs are to clients and shareholders by six of the largest Canadian financial
institutions with the aim of creating
reviewed annually to ensure they remain • Buttressing all the above with a simplified account-based
relevant and effective. corporate programs and initiatives eCommerce platform.
that elevate the corporate profile
Our Board of Directors is comprised of
13 leaders in the financial, technology,
and payments space, including four
Independent Directors. Each member
plays a vital role in the management
and oversight of Interac products,
services, and operations to ensure all
decisions are made in accordance
with applicable regulations, by-laws
and agreements.
INTERAC 2020 CORPORATE YEAR IN REVIEW 14 15
CORPORATE GOVERNANCE
A Culture of Good Ethics In 2020, we also formalized the
policies and procedures of the
Ombudsman’s Office of Interac
Winner of 2020
Best in Corporate
and Compliance Corp. A Terms of Reference
was created in 2020 to set out
Governance
our mandate, model, guiding (Canada) Award
principles, jurisdiction, scope
of responsibilities, complaint- Presented by the
Good business ethics are essential handling process and records World Finance Magazine
management protocols. The
to governance excellence. Interac has Ombudsman’s Office represents
adopted a values-based ethics and another avenue for escalations
and concerns when all other
compliance program that uses resources methods have been exhausted.
efficiently and closely aligns with our
Expiration of the
corporate culture. Interac employees know
Consent Order
what the rules and policies are, and
understand why they exist. With the pivot 2020 brought the expiration of
the Consent Order, issued by
to a remote workforce, employee the Competition Tribunal in 1984,
resources and a refreshed training that required Interac run on a
not-for-profit basis, setting fees
module were made available online. only to recover costs directly
associated with running the
business. The Consent Order World Finance Magazine recognizes
was amended in 2013, enabling organizations from across the globe
us to restructure in 2018, while that represent best-in-class corporate
still maintaining a cost-recovery governance, exemplary regulatory
model for shared services. The compliance, and investor relations.
expiration of the Consent Order
marks the official end of our
restructuring journey. This new
chapter for Interac allows us to
grow and diversify our product
offerings for Canadians while
continuing our commitment as a
low-cost solution for merchants.
INTERAC 2020 CORPORATE YEAR IN REVIEW 16 17
Strategy and
Corporate Performance
Interac plays an important role in the Canadian
payments ecosystem, connecting our participants
to their customers across Canada. The Interac
Board of Directors provides strategic oversight and
guidance to management to help Interac deliver
business results and value for all stakeholders.
INTERAC 2020 CORPORATE YEAR IN REVIEW 18 19STRATEGY AT A GLANCE OVERVIEW OF INTERAC CORP.
Response to COVID-19 Millions of Canadians depend
on Interac solutions every day, a
those self-isolating and unable to work
at the beginning of the pandemic.
Pandemic
responsibility we do not take lightly. The Canadian Hospitality Worker Relief
Our business continuity planning Fund also used the Interac e-Transfer
helped us effectively transition all 450+ platform to disburse funds to grant
employees to work from home and recipients in the hospitality industry.
maintain all core systems without
disruption – ensuring Canadians could Businesses across the country also
The COVID-19 pandemic impacted the continue to buy the things they showed their resilience by pivoting in
needed and move their money during response to government restrictions
lives of all Canadians in 2020. We were this difficult year. and changing consumer behaviours.
forced to change where and how we work, To better serve their customers,
We took extensive measures to build many quickly shifted to digital payment
and to reevaluate our priorities – both at a resilient remote work culture where tools such as Interac e-Transfer. We
work and at home. our employees felt motivated and expanded our digital offerings for small
productive. We ensured employees businesses, supported small businesses
We took extensive measures to were kept up to date on changing
policies, and instituted a work-from-
through internal engagement
initiatives and through our association
help build a resilient remote work home allowance to help them
upgrade their workspace to promote
partners, and focused our marketing
efforts on encouraging Canadians
culture where our employees comfort and efficiency. Interac also to shop local.
prioritized the mental health needs
felt motivated and productive. of our employees by expanding The shift to digital payment solutions
mental health benefits and instituted throughout the COVID-19 pandemic
regular ‘Quiet Hours’ to allow staff illustrated the essential role Interac
to work without interruption as well plays in Canada’s economy, as
as manage household demands. evidenced by the record transaction
numbers for digital solutions like
While COVID-19 has been difficult Interac e-Transfer. This year, the
for everyone, it has been especially Bank of Canada deemed Interac
difficult for Canadians struggling in e-Transfer a Prominent Payment System,
our communities. We worked closely further underscoring the importance
with governments and our partners of our network in Canada’s
to distribute emergency funds to economic stability.
Canadians in need of support. The
province of Alberta distributed a
one-time COVID-19 relief payment
via the Interac e-Transfer service for
INTERAC 2020 CORPORATE YEAR IN REVIEW 20 21CORPORATE PERFORMANCE
Corporate 2020 Snapshot
Performance Our Performance
Indicators
Our
Highlights
Our
Investments
Transaction 45%: YoY growth of Interac 56%: Share of contactless 11.8%: YoY growth of Interac + Increased investments to support retail
e-Transfer transactions transactions across all Debit contactless and business products & solutions:
In a year of unprecedented Every year, our financial Growth Interac Debit transactions
Transit capabilities
mandate includes
uncertainty and change, Interac Digital ID
commitments to: Revenue growth: Revenue drivers: In-App & In-Browser
met its financial targets for the SDK proximity capabilities
Interac e-Transfer technical releases
21%: Consolidated 25%: New users of Interac 2Keys New revenue
2020 fiscal year. Careful financial • Maintain an affordable
Revenue
growth in 2020 e-Transfer revenue
+ Resiliency of our network
management of our operations pricing structure for
merchants
created a stable, resilient Interac, Covid-19 Implications on Interac Debit transactions:
+ Preparations for the Real-Time Rail with
Payments Canada
which enabled us to provide • Scrutinize operating costs to
drive value to shareholders + Culture transformation through the
5.7%: Decline in overall Debit 2.3%: YOY decline in Interac
the uninterrupted service required transactions due to govern- Debit revenue Barrett Model TM and McLean &
Company to respond to employee
ment-imposed closures of
of a business embedded in the • Earn profit to cover Interac
operational costs, with
nonessential services trends and feedback
day-to-day lives of Canadian an eye to moving toward + Digital workplace, including Workday,
a human resource management
consumers and businesses. a self-funded model Fraud Rates $37.5M: Prevented in fraud losses
for Interac e-Transfer,
60%: Increase in successful
phishing takedownsC ORPOR AT E P E R F OR MAN CE
Digital Transaction Growth in Canada
COVID-19 changed the way Canadians transact, accelerating the
shift to digital payments and driving Interac transaction growth.
5.8 billion total 11.8% YoY growth of 3.29 million Interac Debit 64.5% YoY growth of 45% YoY growth of 145% YoY growth of
Interac Debit Transactions Interac Debit contactless transactions in apps and on websites Interac Debit for online transactions Interac e-Transfer transactions Interac e-Transfer Bulk
69.92M
Oct 2020
1.28M
310.6M 458,129 Oct 2020
528.1M 511.4M Oct 2020 Oct 2020 492,974
Nov 2019 Oct 2020 Oct 2020
268.4M
Nov 2019
752,619
Nov 2019
110,379 196,248
Nov 2019 47.94M Nov 2019
Nov 2019
Key moment: March 12-15 2020 Key moment: August 2020 Key moment: June 2020 Key moment: March 2020 Key moment: March-May 2020 Key moment: August 2020
Interac Debit Chip and PIN transaction size Contactless transactions up 85% in restaurants Avg. value of Interac Debit transactions Sharp increase in volumes as individuals Businesses received 35% more Interac Interac e-Transfer Bulk transactions reach
Increased 53% at grocery and drug stores. and other eating places compared to in apps at restaurants/food establishments shifted towards online shopping for e-Transfer transactions than originally record volumes.
April 2020. increased more than 10% compared to industries such as gambling/lottery and forecasted.
before the pandemic. food delivery.
INTERAC 2020 CORPORATE YEAR IN REVIEW 24 25OVERVIEW OFPERFORMANCE
CORPORATE INTERAC CORP.
2020 Business Through the careful management of our technology,
products and business operations, Interac realized
2021 Key Focus The pace of digital acceleration has never been greater.
Our transaction data has been a key indicator of the state
Highlights a number of successes that enabled a strong fiscal year Areas of the economy based on Canadians’ behaviours spending
despite the uncertainty of COVID-19. and moving money. We are accelerating our roadmaps in 2021,
focusing on people, products and solutions, and technology.
Technology Product and Innovation Business Operations People Products and Solutions
• Renewed important • Using modern APIs, Interac • Supported the increase in • Designed digital ID capa- • Enacted business continuity planning • Continue culture • Maintain profit-aware • Evolve our strategic
vendor contracts to help enabled the first Canadian Interac Debit contactless bilities and developed process in response to the COVID-19 transformation and operations and transaction roadmap to sustain
us further enhance our real-time payment in per-transaction limit in proofs-of-concepts on pandemic, pulling together a strengthen employee volume growth long- term growth
networks’ resiliency, ISO20022 format, providing response to market shift emerging digital ID tech- dedicated team to closely monitor feedback
availability and security ultra-enhanced security toward contactless nologies, sponsored and public health recommendations, • Pilot viable eCommerce • Continue work with
and rapid transfer of funds checkout funded by the Canadian make changes to company and • Continue Diversity & solution supporting Payments Canada to build
• Modernized fraud data Federal Government employee policies, and ensure we Inclusion work and one-off, recurring and a modern payments’
environments and • Achieved 100% availability • Four financial institutions were prepared for future scenarios strengthen employee subscription-based ecosystem
processes to increase for Interac e-Transfer launched Interac e-Transfer • Co-developed National and community payments
automation, security Bulk Payables, and two Standard for Digital ID, • Completed a successful financial engagement • Elevate our leadership in
and resiliency financial institutions accredited by Standards analysis and reforecasting to respond • Enhance Interac e-Transfer digital ID and launch the
launched Interac e-Transfer Council of Canada to COVID impact • Increase customer for business capabilities & Interac digital ID service
• Hit a record of almost Bulk Receivables satisfaction market adoption
70 million Interac • Participated in the first • Rolled out new digital platforms
e-Transfer transactions in • Interac e-Transfer had Federal Government across the organization, including • Support Interac Debit
October 2020, the last its first data-rich payment Consultation on Open Workday, Bucketlist, and Concur, contactless transaction
Technology limit increase
month of our fiscal year sent using ISO20022 Banking to enhance employee efficiency
and recognition
• Launched the new • Closed the fiscal year • Completed behavioural in- • Improve fraud risk score • Enable open payments
Integrated Operations with our lowest fraud rate centivization program with • Launched the Equity and and resiliency on priority transit networks
Centre to provide in-house since 2013 Heart & Stroke Foundation, Empowerment Initiative through
• Maintain uptime • Scale Interac Debit
support to customers reaching almost 100% of our Diversity & Inclusion Program,
• Built our digital ID practice of our network on apps and browsers
anticipated enrolments focusing on 10 workstreams that
with 2Keys Corporation, address different forms of inequity
which we acquired • Engaged in meaningful within our organization and in
November 1, 2019 consultations with our communities
Payments Canada on the
future Real-Time Rail
INTERAC 2020 CORPORATE YEAR IN REVIEW 26 27CORPORATE GOVERNANCE
Our Strategy
1 Pave the Way for Rapid Commercialization
Through a Unified Interac Digital Platform
2 Lay the Foundation for New Lines of Business
3 Build on Our Leading Position in Canadian Payments
4 Seek a Leadership Role in Digital ID
INTERAC 2020 CORPORATE YEAR IN REVIEW 28 29STRATEGIC IMPERATIVE 1
Pave the Way for Rapid Commercialization On October 1, 2020, Interac e-Transfer hit a record 3.9 million
transactions in a single day with zero outages or incidents reported.
Through a Unified Interac Digital Platform
Since restructuring in 2018, Interac Corp. Seamless service through A unified team drives results Best-in-class security
a global pandemic
has focused on unifying our technology Alongside adapting to the lifestyle Over the last couple of years, our To enable instantaneous, higher-value and fraud data environment upgrades
and operations to strengthen our network Interac products are chosen by No projects in technical development changes brought on by the pandemic, Technology and Operations team payments, it’s critical that we continue to improve predictive fraud analysis
and become a stronger part of the Canadians around 18 million times per
day to pay for goods and exchange
or delivery were stalled as Interac
shifted its operations to a fully digital
Interac teams also embraced
organizational shifts designed to drive
embarked on a transformation journey
to improve our payments platforms’
to provide the best-in-class fraud
prevention that Canadian consumers
and detection. We also enabled a
best-in-class technical anti-spoofing
Canadian payments ecosystem. We continue money, making the availability of our environment. Our technical teams internal agility, collaboration and resiliency, reliability, availability and have come to expect from Interac. standard to protect email senders
to consolidate our infrastructure, modernize products and services integral to the
functioning of the country’s economy.
met all planned business obligations
and made significant strides
productivity. Employees embraced
those changes, reflected by the record
security and maintain our leading
position as Canada’s #1 trusted
Recent investments and organizational
shifts have kept us ahead of the
and recipients from spam, spoofing,
and phishing, and advanced our
and enhance our networks, and advance Through effective business continuity modernizing and unifying our networks employee engagement scores and financial services brand.* Adjusting the curve – while Canadian fraud attempts fraud intelligence and monitoring to
the interoperability of our platforms to meet planning, the entire Interac team
shifted to a work-from-home model
to ensure we continued to provide
best-in-class resilience, availability
feedback Interac received in 2020. organizational structure of our
technology groups has been critical
increased in 2020, Interac saw our
lowest fraud rates since 2013.
ensure the safety and security of our
network and participants.
the omni-channel demands of the evolving in March 2020, maintaining service and security. Interac reduced the Key stakeholders from across the to achieving these targets, including
digital landscape. Internally, adapting the quality and security even as Interac
e-Transfer reached an historical single
planned downtime of our networks,
achieved 100% availability for Interac
company came together in cross-
functional and full-stack teams,
bringing separate development and
infrastructure teams together into
Interac embedded security and
risk management more deeply into
way we work and embracing flexibility has day high on May 1, 2020, with over e-Transfer, and launched the new resulting in visible improvements to cross-functional teams to optimize our organizational framework this
been critical to the operation of Interac 3.75 million transactions. To enable
that seamless service, Interac swiftly
Integrated Operations Centre to
provide ongoing application support
internal alignment and agility,
optimizing the delivery of strategic
end-to-end development, delivery
and support. We made further progress
year by bringing managed security
service in-house, leveraging security
as a unified organization – and that mindset bolstered VPN access to all employees, to customers. initiatives, and improving time to in 2020 by realigning our project monitoring services from 2Keys,
became a great asset in 2020. streamlined our workplace tools,
and introduced digital finance, legal
market. Interac also made strides
integrating with 2Keys Corporation
management function within our
infrastructure operations and platform
and embedding security and risk
assessments more deeply into
and HR tools to enhance self-serve following the acquisition of the engineering functions to better the business to ensure security controls,
capabilities and productivity. security leader in November 2019, enable go-to-market delivery and fraud-use cases and countermeasures
resulting in significant progress on our operational excellence, and were in lockstep with product
digital ID platform development. enhanced our capabilities through launches and go-to-market strategies.
the new Integrated Operations Centre. Security measures were employed,
including alignment with industry-
* Interac Corp. tied for #1 most trusted security architecture frameworks,
financial services brand according to upgraded machine learning models,
the 2020 Gustavson Brand Trust Index.
INTERAC 2020 CORPORATE YEAR IN REVIEW 30 31STRATEGIC IMPERATIVE 2
Lay the Foundation for Software advancements
accelerate go-to-market
Supporting new lines
of business
New Lines of Business We continued to accelerate time to
market for our products and services,
Interac is focused on multiple new
forays that our company is uniquely
rolling out quarterly major releases positioned to contribute to, including
and multiple minor software releases digital ID, transit payments and the
in 2020 that enabled production new Canadian Real-Time Rail – each
While operational excellence and Futureproofing our networks readiness for future real-time payment of which underscores our goal of
and workforce
consistent delivery of our ubiquitous network processing and to support the
sustained growth of Interac e-Transfer.
helping Canadians transact digitally
with confidence.
capabilities to clients continues to be at In 2020, Interac continued to Effective futureproofing is also Our teams created this efficiency by
the core of our business, Interac is evolving invest in new technology, processes
and talent needed to support our
dependent on a highly skilled
workforce. In 2020, we grew our
automating our software deployment
pipeline and infrastructure provisioning
• Through 2020, Interac continued to
partner with Payments Canada
our suite of innovative solutions and rapidly expanding slate of products technical team by 14%, acquiring for our applications, allowing our to build a partnership for the design
value-added services. Our technology and services. To support our growing
technology mandate, Interac
top talent, including seasoned experts
with broad payments and industry
teams to focus on value-added
capabilities. We also accelerated the
and delivery of Canada’s new
Real-Time Rail (RTR), which will allow
modernization journey has enabled Interac completed multiple contract renewals experience to fill the roles of VP, adoption of cloud-ready platforms Canadians to initiate payments and
to enter new areas of product and with key vendors, which contribute
to improved network availability,
Platform Engineering & Transformation
and VP, Infrastructure Operations.
for non-production environments used
for product development and data
receive irrevocable funds in seconds,
24/7/365.
service expertise, and an ongoing stream and we increased the operational Meanwhile, we continued to invest in Using modern APIs, Interac enabled the analytics, reducing our lead time for
first Canadian real-time payment in
of technical advancements and new capacity of our payments platforms
to prepare for continued scalability
upskilling our existing staff to the latest
software delivery methodologies
provisioning new environments from
months to days.
• To advance our digital ID work,
we worked closely with 2Keys
ISO20022 format in December 2020,
releases will continue to ensure our ability of our products and services. We also and made organizational changes
providing ultra-enhanced security
to design and implement a cloud-
to grow our reach. continued to modernize our fraud data
environments to increase automation,
to ensure employees were placed in
roles where they would drive the most and rapid transfer of funds.
ready platform architecture
using domain-based microservices,
bolster security and prepare for value. We also embraced new, but which will enable scalable, cost-
future-use cases, and added advanced proven, technologies and processes, effective and highly secure credential
security tooling to speed up fraud and tapped into the external market management applications of
investigations and incident response. for thought leadership and disruptive the future.
thinkers to inform innovation.
• Interac entered a production-ready
state for our Debit transit payments
pilot by completing two major build
releases and a robust security
assessment.
INTERAC 2020 CORPORATE YEAR IN REVIEW 32 33STRATEGIC IMPERATIVE 3
Build on Leading Position While the majority (73%)
of requests made through
Commerce
in Canadian Payments Request Money were made
by retail customers, the
Our international payment offerings
expanded as National Bank officially
became the first bank to offer
Being a leader in Canadian payments
requires that we continue to find new
ways for Canadians to transact when
Even as debit volumes recovered when
restrictions lifted, they remained lower
than pre-pandemic levels, indicating
number of requests made International Transfer by Mastercard ® and where they want, on their own a shift to eCommerce channels.
by commercial customers and Interac ®, which leverages both terms. The pandemic had an immense
increased by 70% over the Mastercard Send and the Interac impact on Canadians’ purchasing Our eCommerce solutions experienced
Interac products and solutions are offered Money Movement
previous year.
e-Transfer platform to enable behaviours. With the exception of significant growth in 2020. Our online
through secure, interoperable, reliable and Interac e-Transfer maintained its Continued investments in the
Canadians to send money to bank
accounts in other countries.
shopping at grocery and drug stores,
commerce ground to a halt when
transaction volumes grew by 64.5%
over 2019. Interac Debit for apps and
efficient platforms that enable us to not position as a leading peer-to-peer modernization, security and resiliency governments instituted states of websites, a relatively new product
only move money, but also move related money movement platform.
As Canadians increasingly required
of the Interac e-Transfer platform
will enable us to deliver on future
2020 was a landmark year for low
fraud losses as a percentage of dollar
emergency. We saw that impact in
Interac Debit transactions, which
in 2020, experienced double-digit
monthly growth due to the demand
digital information and value between our secure, convenient and near real- needs and volumes. We have been volume. Interac prevented $37.5 million declined alongside the lockdown. for online food delivery. We worked
customers. As a result, millions of Canadians time payment options throughout
the COVID-19 pandemic, more
enhancing our capabilities in real-
time payment initiation and
in fraud losses for Interac e-Transfer
and closed the year below two basis When restrictions lifted, contactless
with financial institutions and
merchants to bring the option of in-app
depend on Interac solutions every day – Canadians began using the Interac confirmation, account-based routing, points – meaning, for every $100 transactions were a key driver and in-browser payments to more
a reliance that was spotlighted in response e-Transfer service and in new ways.
As a result, the service experienced
and compliance with ISO20022 to
optimize the service for commercial
spent, less than $0.02 is lost to fraud –
the lowest rate observed since 2013.
of Interac Debit volume recovery as
consumer preference trended towards
Canadians. A total of 29 merchants
were brought onto the service in 2020,
to the economic impacts of the COVID-19 tremendous growth and closed the use and allow the market more ways We also increased the number of contactless checkouts. To help support including McDonald’s, Jack Astor’s,
pandemic. year with 706.4M total transactions –
a 45% increase over the previous year.
to innovate. successful phishing takedowns by
60%, helping limit consumer exposure
a more consistent experience for
consumers, we engaged our partners
and Scaddabush. We are planning
collaborations with Walmart Canada
The enhanced Interac e-Transfer Bulk to risky sites and scams. Those to explore the increase of Interac and Cineplex to enable Interac Debit
Interac successfully grew the footprint Payables product and launch of achievements help position Interac Debit contactless transaction limits in their apps and websites in the first
To ensure we meet the evolving needs of of Autodeposit and Request Money Interac e-Transfer Bulk Receivables will well to maintain a low-risk posture and expand the rollout of contactless half of 2021.
our stakeholders, partners, and Canadian features, further enabling new use further support commercial payments as we enhance the Interac e-Transfer payments. Walmart began enabling
cases for small and micro businesses. and high-volume transactions, product for commercial use. contactless functionality in stores for
consumers and businesses, we will continue Autodeposit transactions accounted offering a viable batch processing card and mobile and Shopify enabled
to build on our leading position in Canadian for 42% of total transaction volume and alternative to Automated Funds the functionality on Shopify POS.
we experienced the largest increase Transfers (AFTs) and cheques. Interac Despite the challenges of business
payments to achieve success today and in new Autodeposit users since its e-Transfer Bulk Payables was used closures and restrictions, Interac Debit
into the future. launch in 2017 with 73.6% growth over by some governments and the contactless transaction volumes for
2019. While the majority (73%) of Canadian Hospitality Worker Relief 2020 were 11.8% higher than 2019 and
requests made through Request Money Fund to disburse relief payments accounted for 56.1% of total debit
were made by retail customers, the quickly and securely to Canadians volumes compared to 19.4% in 2019.
number of requests made by impacted by COVID-19.
commercial customers increased
by 70% over the previous year.
INTERAC 2020 CORPORATE YEAR IN REVIEW 34 35STRATEGIC IMPERATIVE 3
Innovating for the future Open Banking Beyond Payments Data and Trust in the
Age of Disruption Here for Canadians During
To ensure we continue to build on our
position at the forefront of payments
and the evolving digital economy,
Ecosystem collaboration is critical for
a highly complex and nuanced system
like open banking, which hinges
We continued to explore emerging
technologies like blockchain to
engage Canadians in promoting
Debbie Gamble, Chief Officer, Challenging Times
Innovation Labs and New Ventures sat
Interac approaches innovation through not only on consumer adoption but well-being for people and the down with Amy Webb, Futurist and
methodologies and frameworks broad stakeholder participation planet. We partnered with the best-selling author to discuss the
that lead to strategic foresight. While and a trusted and secure network that Heart and Stroke Foundation to implications Canadians should keep
we can’t predict the future, we can facilitates confidence. We conducted incentivize Canadians to enrol in in mind when surrendering their trust. Canadians were faced with great uncertainty • Fraud Prevention Awareness: We also provided support to industry
Our Interac Fraud Prevention Index associations to continue their
be best prepared for it. Evaluating
different perspectives and possible
consumer-focused quantitative and
qualitative research, built key alliances,
a program designed to help them
manage their blood pressure,
in 2020 – not just over their health, but their drew responses from over 2,200 important advocacy work on behalf
outcomes (scenarios) allows us to and leveraged memberships across showcasing the ability for Interac finances, their jobs and the economy. Interac Canadians on their comfort level and of small businesses and retailers
ability to spot fraudulent attempts. during the pandemic.
make better decisions to prepare for
what’s to come. As the ever-evolving
the industry to gather critical market
intelligence to inform what an open
and its partners to meaningfully
engage Canadians and demonstrate
was there to educate Canadians about Results found that six in 10 Canadians
payments and technology landscapes banking framework in Canada could new and innovative ways that the changing fraud landscape and how they are more worried about fraud • Interac Data Insights: To help inform
today than ever before, highlighting Canada’s economic recovery,
present opportunities beyond just
Interac, we are now collaborating with
look like. Through our stakeholder
engagements, Interac was elected
Interac and its partners can provide
value back to Canadians.
can protect themselves, welcome back the need for improved fraud literacy. Interac tracked the evolution in
our Board to explore future market to the FDX Board of Directors small businesses after a challenging lockdown, To educate Canadians, Interac consumer spending that took
collaborated with law enforcement place after the initial lockdown and
scenarios with the intent of providing
insights that will help Interac and
for North-America and Co-Chair for
Canada. We also completed
and provide insight into economic recovery. authorities across Canada to release provided timely data to media,
key stakeholders better prepare for a proof of concept demonstrating tips on spotting fraud and reporting government and stakeholders on
a range of strategic opportunities. our data aggregation and consent suspicious activity, and provided Interac Debit and Interac e-Transfer
management capabilities, and education through the year on usage to Canadians. Our findings
In 2020, we explored emerging consumer experience flows across transacting online safely. showed that Canadians were ready
technologies and trends that will help each ecosystem stakeholder. Our to spend money as long as they
Canadians continue to transact efforts resulted in Interac being invited, • #WelcomeBack Advocacy: Small could do so safely and securely, and
digitally, safely, conveniently and in as part of a select group, to present businesses play a crucial role they were opting for digital solutions
real time. From next-generation digital at the second-round consultation in strengthening our communities like Interac Debit contactless
payments, open banking, blockchain on open banking, hosted by the and many had to close their payments, in-app/in-browser and
and digital ID, we innovate with the Department of Finance. That put Debbie Gamble, Chief Officer, doors as a result of the pandemic. Interac e-Transfer over cash and
needs of Canadians in mind, ensuring Interac in a prime position to influence Innovation Labs and New Ventures As businesses began to safely reopen cheques. Businesses were also
trust and consumer confidence. an open banking framework in named FemTech Leader of the Year under different dimensions and adapting to restrictions by offering
Canada, whereby convening the (2019) by Digital Finance Institute, and safety measures, Interac highlighted contactless solutions and shifting
ecosystem will ensure consumer one of Canada’s 50 Best Executives our support for local businesses to Interac e-Transfer to continue
experience and data rights are front by The Globe and Mail (2020). through a social media campaign, to service customers.
and centre. encouraging Canadians to share
their favourite local business signs
using the hashtag #WelcomeBack.
INTERAC 2020 CORPORATE YEAR IN REVIEW 36 37STRATEGIC IMPERATIVE 4
Seek a Leadership Role
in Digital ID
The importance of a digital identity Trust and Identity in a Raising awareness of the
Digital World Interac role in digital identity
framework was highlighted during the
COVID-19 pandemic as experiences and According to a 2020 Interac survey: The foundational technology, • Spoke at numerous industry events
transactions moved online, emphasizing • 75% of Canadians said government
capabilities and experiences behind
the Interac brand puts us in a unique
and conferences such as the
Conference Board of Canada
the need for a future where key services services should be accessible online position to enable digital ID across
like health care are easily, securely • Approximately half agreed it is more
a range of use cases, devices and
platforms for the benefit of both
• Continued to advocate for
standardization and interoperability
and safely accessible online and identity important now than pre-COVID-19 the public and private sectors. To do through Board, Co-Chair, and We also contributed to the production
is verified. to access health (55%) and
government services (50%), such
this effectively, trust and governance
need to be established as fundamental
Working Group memberships within
various industry associations and
of Canada’s first national digital ID
standard recognized by the Standards
as renewing a driver’s license and components of the ecosystem. We standards bodies (DIACC, CIO Council of Canada. That work is
registering for benefits online focused our efforts in 2020 on sharing Strategy Council, Kantara Initiative) critically important as it sets out the
our expertise and capabilities with early standards for using digital ID
• The perception of the convenience governments and key stakeholders • Launched a national survey to connect people and communities
of digital versions of identity in the market: assessing the opinions of Canadians across the country on a repeatable,
Identity North Founder of Canada’s documents (driver’s licenses/health on their identity needs since the scalable and trusted basis. We also
Digital Economy Award. In 2020, cards) grew 10 percentage points • Responded to numerous onset of the pandemic contribute to the Canadian Forum
from 2019 procurement and consultation for Digital Infrastructure Resilience,
Mark O’Connell, President & CEO opportunities launched by demonstrating our commitment
• Delivered four new white papers
of Interac Corp., was awarded • Security remains a key consideration, governments across Canada to exploring use cases for digital ID to trusted digital outcomes for all
the Founder of Canada’s Digital with 67% of Canadians saying they provide information about our in sectors including alcohol and Canadians, now and in the future.
Economy Award, which honours are open to using a digital ID if their vision for an interoperable digital cannabis, lottery and gaming,
identity data is better protected ID network health care and air travel; additional
outstanding Canadians who have than it is today white papers and public awareness
transformed the digital economy efforts will continue into 2021
both at home and internationally.
INTERAC 2020 CORPORATE YEAR IN REVIEW 38 39STRATEGIC IMPERATIVE 4
Expanding our Capabilities with Inside 2Keys
2Keys Corporation, an Interac Company National leader in research,
policy, process, operations
and technology for Digital
Identity, Access and Cyber
Our acquisition of 2Keys Corporation Implementing digital ID and building The digital ID team collaborated with Security in Canada
trust is a shared challenge, making the governments of British Columbia
on November 1, 2019, marked an exciting partnerships between public and and Ontario to deliver a proof
chapter in our growth story, ushering in
a unique opportunity for Interac to create
private-sector organizations essential
for success. We continued to
strengthen key relationships in 2020
of concept demonstrating how a
provincially issued credential could
be utilized in a mobile wallet to
100%
a comprehensive digital identity solution within public and private sectors
to position Interac as a trusted partner
access federal, provincial and private
sector digital services. We also
Canadian
for the Canadian marketplace, government, for the enablement of a Pan-Canadian produced a digital wallet prototype
and industry. In addition to raising awareness
20+ years
digital identity network. The network for the federal government that
will enable Canadians to utilize demonstrated a completely digital
about Interac’s role in digital identity, their most commonly used documents experience for new Canadians
we continued to build on our capabilities in
2020 and demonstrate those capabilities
(e.g., driver’s licenses) digitally to
verify their identity and access a range
immigrating to Canada, and were
selected alongside other organizations of experience
of services with convenience and to deliver a proof of concept
to key stakeholders in the ecosystem. confidence. demonstrating an interoperable digital
wallet and credential management
capabilities relating to birth certificates
Over 40M As Canada’s #1 Trusted
for Innovation, Science and Economic
Development Canada. Those projects users of Financial Services brand*,
demonstrate our ability and desire
to support emerging digital identity 2Keys services Canadians already use
technologies and their relationship
to a digital identity ecosystem.
and trust Interac millions
of times each day when
1M+ logins it comes to accessing
per day and moving their money.
*2020 Gustavsson Brand Trust Index
INTERAC 2020 CORPORATE YEAR IN REVIEW 40 41You can also read
