Interac is a Canadian

interbank network An interbank network, also known as an ATM consortium or ATM network, is a computer network that enables ATM cards issued by a financial institution that is a member of the network to be used to perform ATM transactions through ATMs that belon ...

that links financial institutions and other enterprises for the purpose of exchanging electronic

financial transaction A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...

s. Interac serves as the Canadian

debit card A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but u ...

system and the predominant funds transfer network via its e-Transfer service. There are over 59,000

automated teller machine An automated teller machine (ATM) or cash machine (in British English) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, fun ...

s that can be accessed through the Interac network in Canada, and over 450,000 merchant locations accepting Interac debit payments.

History

The network was launched in 1984 through the

nonprofit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...

Interac Association, a cooperative venture between five

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

s: RBC,

CIBC The Canadian Imperial Bank of Commerce (CIBC; french: Banque canadienne impériale de commerce) is a Canadian multinational banking and financial services corporation headquartered at CIBC Square in the Financial District of Toronto, Ontario. T ...

Scotiabank The Bank of Nova Scotia (french: link=no, Banque de Nouvelle-Écosse), operating as Scotiabank (french: link=no, Banque Scotia), is a Canadian multinational banking and financial services company headquartered in Toronto, Ontario. One of Canada ...

, TD, and Desjardins; by 2010, there were over 80 member organizations. The group founded a for-profit counterpart organization, Acxsys, in 1996, which launched additional Interac-branded services including e-transfers. Following several aborted merger attempts which were either blocked by the

Competition Bureau The Competition Bureau (french: Bureau de la concurrence) is the competition regulator in Canada. It is an independent Canadian law enforcement agency that ensures that markets operate in a competitive, innovative manner. Headed by the Comm ...

or by some of the co-owners between 2008 and 2013, Interac and Acxsys were combined into a single for-profit organization, Interac Corporation, on 1 February 2018. Interac's head office is located at

Royal Bank Plaza Royal Bank Plaza is a skyscraper in Toronto, Ontario, Canada that serves as the "corporate headquarters" for the Royal Bank of Canada. The building shares with the Fairmont Royal York Hotel the block in Toronto's financial district bordered by ...

Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the ancho ...

. In 2019, Interac Corporation acquired 2Keys Corporation, Ottawa-based

digital identity A digital identity is information used by computer systems to represent an external agent – a person, organization, application, or device. Digital identities allow access to services provided with computers to be automated and make it possibl ...

and

cyber security Computer security, cybersecurity (cyber security), or information technology security (IT security) is the protection of computer systems and networks from attack by malicious actors that may result in unauthorized information disclosure, the ...

for governments, financial institutions and commercial clients. In 2021, Interac Corporation acquired the exclusive rights to the digital ID services for Canada from the digital ID and authentication provider SecureKey Technologies Inc. On July 8, 2022, all Interac services were disrupted in Canada due to a nationwide

Rogers Communications Rogers Communications Inc. is a Telecommunications in Canada, Canadian communications and media company operating primarily in the fields of mobile phone operator, wireless communications, cable television, telephony and Internet access, Intern ...

network outage resulting in millions of dollars in lost transactions for businesses. On July 11, 2022, Interac stated they were adding another provider in addition to Rogers to strengthen their network redundancy.

Services

Interac is the organization responsible for the development of a national network of two shared electronic financial services:

Interac Direct Payment (IDP)

Interac Direct Payment (IDP) is Canada's national

service for purchasing of goods and services. Customers enter their

personal identification number A personal identification number (PIN), or sometimes redundantly a PIN number or PIN code, is a numeric (sometimes alpha-numeric) passcode used in the process of authenticating a user accessing a system. The PIN has been the key to facilitat ...

(PIN) and the amount paid is deducted from either their chequing or savings accounts. As of 2001, the number of transactions completed via IDP has surpassed those completed using physical money. Beginning in 2004, IDP purchases could also be made in the United States at merchants on the

NYCE The New York Currency Exchange (NYCE) is an interbank network connecting the ATMs of various financial institutions in the United States and Canada. NYCE also serves as an EFTPOS network for NYCE-linked ATM cards. NYCE is based in Secaucus, N ...

network. IDP is similar in nature to the

EFTPOS Electronic funds transfer at point of sale (EFTPOS; ) is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale. EFTPOS t ...

systems in use in the United Kingdom, Australia and New Zealand. Interac Direct Payment is a PIN-based system where the information entered on the PIN pad is encrypted and verified at a central server, rather than being stored on the card itself. Because of this, it is significantly more secure than traditional signature or card-based transactions. Despite these security features, there are ongoing fraud concerns, particularly when debit cards are ''duped'' or ''skimmed'' — a compromised

or point-of-sale terminal will record the account information contained in the magnetic strip of the card, allowing for duplicate cards to be created at a later time. The owner of the card is then secretly video taped or observed entering their PIN, allowing a criminal to use duplicate cards to make fraudulent purchases.

Interac chip cards

In 2007, Interac announced it would be moving to

EMV EMV is a payment method based on a technical standard for smart payment cards and for payment terminals and automated teller machines which can accept them. EMV stands for " Europay, Mastercard, and Visa", the three companies that created th ...

chip card A smart card, chip card, or integrated circuit card (ICC or IC card) is a physical electronic authentication device, used to control access to a resource. It is typically a plastic credit card-sized card with an embedded integrated circuit (IC) c ...

technology. The main benefit to this technology over the existing magnetic stripes is that the chips are almost impossible to copy due to high levels of encryption.

Shared Cash Dispensing (SCD)

Shared Cash Dispensing (SCD):

cash In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-imm ...

withdrawals from any ABM not belonging to a cardholder's financial institution. This Canada-specific service is similar to international systems like

Plus Plus may refer to: Mathematics * Addition * +, the mathematical sign Music * ''+'' (Ed Sheeran album), (pronounced "plus"), 2011 * ''Plus'' (Cannonball Adderley Quintet album), 1961 * ''Plus'' (Matt Nathanson EP), 2003 * ''Plus'' (Martin Ga ...

Cirrus Cirrus may refer to: Science *Cirrus (biology), any of various thin, thread-like structures on the body of an animal *Cirrus (botany), a tendril *Infrared cirrus, in astronomy, filamentary structures seen in infrared light *Cirrus cloud, a type ...

. Virtually every ABM in Canada is on the Interac system.

Interac e-Transfer Service

The Interac e-Transfer service is offered by CertaPay. It allows online banking customers to send money to anyone with an e-mail address and a bank account in Canada. Prior to February 2018, this was an Interac-branded service operated by Acxsys Corporation. Interac e-Transfer service is designated as a prominent payment system and is subject to oversight by the Bank of Canada.

Interac Online

The Interac Online service allows customers to pay for goods and services over the Internet using funds directly from their bank accounts. Because no financial information is shared with the online merchant, the Interac Online service is more secure than online credit card payments. This service, an Interac branded service operated by Acxsys Corporation prior to February 2018, began in 2005 and is expanding as more merchants choose to participate. Since November 2007, the service has been available to customers of four of the five largest Canadian banks: RBC, BMO,

, and

TD Canada Trust TD Canada Trust, frequently shortened to simply TD, is the commercial banking operation of TD Bank Group in Canada. TD Canada Trust offers a range of financial services and products to more than 10 million Canadian customers through more than 1,1 ...

, the sole outlier, uses

Visa Debit Visa Debit is a major brand of debit card issued by Visa in many countries around the world. Numerous banks and financial institutions issue Visa Debit cards to their customers for access to their bank accounts. In many countries the Visa Debit ...

for online payments from bank accounts. As of February 2009, the service is offered by roughly 300 merchants including two large universities (for tuition payments), two major wireless carriers, provincial lottery corporations, and a wide variety of retailers. Interac Online is an

Online Banking ePayments Online Banking ePayments (OBeP) is a type of payments network, developed by the banking industry in conjunction with technology providers. It is specifically designed to address the unique requirements of payments made via the Internet. http://icpno ...

service very similar to

iDEAL Ideal may refer to: Philosophy * Ideal (ethics), values that one actively pursues as goals * Platonic ideal, a philosophical idea of trueness of form, associated with Plato Mathematics * Ideal (ring theory), special subsets of a ring considere ...

in the Netherlands,

Giropay Giropay is an Internet payment System in Germany, based on online banking. Introduced in February 2006, this payment method allows customers to buy securely on the Internet using direct online transfers from their bank account. The system is si ...

in Germany, and

Secure Vault Payments Nacha manages the development, administration, and governance of the ACH Network, the backbone for the electronic movement of money and data in the United States, and is an association for the payments industry. The ACH Network serves as a netw ...

in the United States.

References

Bibliography

* Interac Association (2006). At the Merchant 2006. Retrieved 19 June 2006, from https://web.archive.org/web/20060717152738/http://www.interac.ca/en_n2_11_howitworks.html * Interac Association (2006). At the Merchant 2006. Retrieved 19 June 2006, from https://web.archive.org/web/20060721144717/http://www.interac.ca/en_n2_12_benefits.html * Interac Association (2006). At the Merchant 2006. Retrieved 19 June 2006, from https://web.archive.org/web/20060718165146/http://www.interac.ca/en_n2_13_fees.html

External links

Interac website
{{Interbank networks Financial services companies established in 1984 Banks established in 1984 1984 establishments in Ontario Financial services companies of Canada Interbank networks Payment systems Debit cards Debit card issuer associations Banking in Canada Companies based in Toronto