Interac Debit is more than just a retail payment option

Since Interac hit the scene in 1984, they have been providing merchants with a PIN-secured, lower-cost option over traditional credit cards in the card-present space; but they are a whole lot more. Interac is the most popular payment method in Canada, accounting for over 56% of electronic payments. Originally a collaboration of 5 of the largest banks in Canada, they now have over 80 member banks and financial institutions supporting Interac services.

Interac’s pricing makes it attractive to merchants, because they have only a small switch fee and most have no interchange. Nearly all debit transactions run across the Interac rails in Canada, including Visa Debit, introduced a decade ago to compete in the debit market. Cards supporting Visa Debit are a hybrid that use Visa’s network for online transactions only. Below is a table showing a comparison of the effective cost of a $100.00 CAD transaction on the different payment rails.

Interac crossed the border in 2004, partnering with NYCE to allow Canadian cardholders to use their preferred payment options at US Merchants primarily located around popular travel destinations and border towns. In 2007, they moved to chip technology for better security and expanded Interac Online, which requires issuer authentication to reduce fraud. Their I-Flash card offers “tap” functionality for NFC-enabled POS devices.

Interac transactions showed a 54% YoY growth in 2018, according to recently released statistics, making this is a card network worth paying attention to. The bottom line – if you want to succeed in the Canadian marketplace, Interac Debit and Interac Online is a must!

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