Episode 46: Finding your path in Canada’s payment ecosystem

Elizabeth (Liz) Dempsey:
Welcome back to The SUMMIT Summer Series, a special presentation by The PayPod, the podcast from Payments Canada that explores the trends and topics influencing payments in Canada and around the world.

I am your host, Liz Dempsey.

First, an announcement: Today is Wednesday, August 19 and we’re delighted to share that registration for The 2027 SUMMIT is now open! We’ll be back at the Automotive Building on May 4–6, 2027, and we are currently offering our lowest possible ticket price.

Given that all of the event details aren’t currently live, we know those who sign up are doing so based on their sheer interest in payments and their trust in our event, and we want to thank you and reward you for that. In fact, listeners of The SUMMIT Summer Series get an even bigger reward with an additional $100 off your ticket when you enter promo code SUM27PAYPOD when registering on thesummit.ca. Thank you for listening and for your continued engagement!

So it seems especially appropriate on today’s episode to reprise a panel from the stages of The 2026 SUMMIT entitled "Finding your path in Canada’s payment ecosystem.” With no shortage of exciting development in payments, this discussion looks at how emerging players can effectively navigate our rapidly transforming payment landscape to power their growth.

We join moderator Olivia Tang, Senior Vice President of Legal at People's Group, as she guides our expert panel. Joining the discussion are: Rohitash Hural, Associate Vice President of Strategic Accounts at People's Group Kartik Kamat, Vice President, Product Management at Mastercard Josh Rowat, Banking and Expansion Manager for North America at Wise and Alena Scotchmer, Partner at Gowling WLG.

In their conversation, they break down the trade-offs between transaction speed, cost and certainty and explain why building compliance directly into the foundation of a business is the ultimate recipe for long-term success.

Enjoy the conversation. Here is Olivia Tang.

Olivia Tang: 
Okay. Well, good afternoon everyone. My name is Olivia Tang. I'm SVP of legal at People's Group. I'm really excited today to moderate this panel and I hope that it's going to give you a very practical lens on money movement options to choose. So, we've been talking about, you know, real-time rails a lot. That's obviously a new option for payment service providers to choose, but we shouldn't forget about some of the existing options today. And we're going to go over that a little bit. So with real time rails coming soon, you're going to have, you know, one additional money movement option. And we shouldn't forget also that, you know, networks and systems are opening participation. So, you know how you participate is another option for companies or fintechs to choose. So they're facing more options which is good but also it can be a complex decision to make. So I'm hoping today you know I have four really good panelists giving you different angles on what to look at and hoping that you know you can get some practical ideas on how to choose um the what and the how. So with that said I'm hoping we can kick off with Rohitas introducing himself.

Rohitash Hural: 
Hi everyone, thank you for coming here. I'm Rohitash and I'm the AVP of strategic accounts at People's Group. So I manage our network partners as well as strategic partnerships. I've been with People's for five years and I really enjoy what I do, which is work with fintechs, solve some really crucial problems that are going to change our economy as we learned in the morning. Over to Karthik.

Kartik Kamat: 
Awesome. Hello everyone. Thank you so much for joining us today. So, my name is Karthik. Uh I work at Mastercard and lead our consumer cards portfolio comprising credit, debit and prepaid cards. What that means is my team and I work very closely with banks, fintechs, credit unions in the Canadian ecosystem, helping them think through the value proposition of their cards and how they use that to drive meaningful customer engagement. Before Mastercard, I worked at EQ Bank, where I helped build and launch the EQ prepaid card product as well as build out a BIN sponsorship business where we worked very closely with a number of fintechs helping them launch uh prepaid and credit cards. So, thank you once again to Payments Canada for inviting me on behalf of Mastercard and I look forward to the discussion.

Josh Rowat: 
Very cool. Hi, nice to meet you all and again thank you for joining our session. My name is Josh. I'm part of Wise. For those of you that don't know Wise, basically we focus on moving money all over the world. Our bread and butter is cross-border payments. But through doing that, we've managed to solve a lot of our domestic customer needs. And so my team and I, we focus predominantly on North America. So any USD and CAD moving anywhere around the world. So great to be here. Really excited for the conversation and yeah, over to you.

Alena Scotchmer: Thank you so much. So my name is Alena Scotchmer. I'm a partner at the law firm Gowling WLG here in Toronto. I advise on all kinds of financial services regulatory matters including in the worlds of payments and AML and I'm super delighted to be here today.

Olivia Tang: 
Great. I'm going to start with you Alena. So with anyone who's looking to enter the Canadian market, right? What do you think are the basic key things that they need to know first?

Alena Scotchmer: 
Sure. So, for Fintechs, I always like to say we have a sort of a patchwork approach to the sort of legal and regulatory environment. I'm going to borrow an analogy from Ann Butler from the Bank of Canada who was just on the main stage talking about a campsite. So, she was talking about how there are different tents depending on what you're doing and some of the tents have expanded recently and different sets of rules or these tents apply depending on what you're doing.

So we have a few different worlds that may be relevant depending on a fintech’s activities here. There's the world of sort of uh cards and FCAC provincial consumer protection. We've got the world of Payments Canada of course uh AML laws including the PCMLTFA and in Quebec the MSB regime there and then that sort of expands outward to include things like securities regulation and other things. Obviously, the tent becoming bigger is the world of the Bank of Canada in particular through the RPAA, which came fully into force in 2025. And then we're also looking at adding new tents to the campsite. So, we've got the Stablecoin Act coming in. We've got consumer-driven banking, the RTR, and then against all of that, we have sort of evolving approaches to things like fraud and financial crime. We have the National Anti-fraud Strategy. We have a new federal financial crimes agency coming in. So our campsite is in flux at the moment and has a bunch of different tents up there depending on who you are and what you're doing.

Olivia Tang: 
Karthik, I wonder if you can tell us you know everybody's talking about the RTR but like some of the other rails that you know you see fintechs use today and how are they using it?

Kartik Kamat: 
For sure. Maybe one quick comment that's a lot of acronyms we have in the business world. So maybe we'll do a separate session on that. So, great question Olivia. So when I look around the industry more broadly, especially with fintechs in mind there isn't a singular prescribed approach that fintechs have typically taken for money movement. From what I see, fintechs typically start with identifying what is the customer pain point that they're trying to solve for and then orchestrate the various payment rails that are available to them to solve that. So let me take a few examples to bring that to life.

I'll start with EQ Bank since I've worked there before. The customer pain point is that banking today in Canada is very complex and very costly. So what does that mean? When you open a bank account, you need to open a chequing account, you need to open a savings account, you need to move money between the two accounts. If you don't do that frequently enough, you could get inactivity fees. And that leads me to believe that banking is very costly.

I find it quite strange that you need to pay money to access your own money, right? Ten years back you had to actually pay a dollar each to make an e-Transfer from your own account. Even today, you need to pay fees to withdraw money from ATMs.

So what did EQ Bank do? They started one hybrid checking and savings account, which allowed customers unlimited number of transactions at no fees at all. They layered on e-Transfers, EFTs to help customers move money in and out. And it was only 3 or 4 years later after that launch that they realized that they need a card product in order to make that bank account a primary banking account for the customer.

I'll take one more example. Koho. What is the customer pain point? That I don't have I as a customer don't have enough control on my spending because of which I could end up incurring fees like overdraft. Right? So then what did Koho do? They started off with a prepaid card with the premise that if you can only spend the funds that you have sitting on the card and not more than that. So they launched the prepaid card and then layered onto that features like real-time notifications, spending buckets, categorization of expenses and as you start to sort of realize fintechs take different approaches right? EQ Bank started with the account, Koho started with the prepaid card.

I'll give you one last example. Neo Financial. So what is the customer pain point there? So I as the customer don't get enough value from the amount that I spend on my cards. Reward systems in Canada are difficult, complex to understand and difficult to redeem. Loyalty programs are somewhat broken. So what did Neo do? They started with a credit card. So access to credit was another pain point they were trying to solve for. But then they layered on top of that merchant funded offers and a very robust loyalty program. Right?

So if I think of these three examples, what do they all have in common? Apart from the fact that they all work with Mastercard it’s that one of them started with a customer pain point first, right? And then figured out what's the right payment rails to orchestrate and solve for that customer pain point, right? And uh again like where does and going back to your question around sort of where I see Mastercard fitting in, the answer there is flexibility, right? We offer a number of different payment products whether it or payment rails whether it is prepaid, credit, debit or even Mastercard Send which is near realtime money movement uh account to account money movement, which gives flexibility to organizations of fintechs to figure out which one works best for the customer pain point they're trying to solve.

Olivia Tang: 
So Josh after hearing that when Wise, you know, moving money globally, how did they look at what's available at the time?

Josh Rowat: 
Yeah I think that's where what Karthik was touching on, it always starts with what is the customer need like what are you trying to solve for there. And I think that's when we came to Canada that was where we were trying to figure out all right what is our customer need sending and receiving payments and what solution is going to provide the most coverage to meet those needs. And as you were saying there are so many options today and so we started off with just traditional EFTs or AFTs, ACSS transactions, PADS, so anything that went through ACSS. And because that covered, you know, maybe almost 100 per cent of the use cases of like the limitations, you know, it wasn't perfect, but it meets our customer needs.

And then I think what Karthik was touching on is like, okay, now we've solved the primary issue of like can I send the money? Can I receive the money? Now okay, can I make it cheaper? Can I make it faster? Can I make it more convenient? So that's what you know we started with the well with what you were touching on earlier about the regulatory you know setting up yourself getting the license getting the entity locally and then it is like okay what is that first step. And that that brings all of that coverage and that's kind of the journey we've been on for the last six years or so is bit by bit adding more and more options uh such as e-Transfer solving a lot of issues bill payments also solve uh pay customer pain points. So I think like that is just chipping away at again going back to like what do the customers need? What are we solving for?

And we actually packaged all of this as well into what we refer to as our Wise platform product and we saw that a lot of the things that we were solving for our app. We were actually able to extend it out to others. You mentioned you used to work at EQ Bank which is a really good example of that and others. So they have the same problems to solve. You know if they're a large corporation or a financial institution outside of Canada and their customers have Canadian needs or the same Canadian institutions trying to solve for their customer needs abroad.

Olivia Tang: 
Yeah. So what I'm hearing is you understand the landscape but then you know think about the pain points you're solving for first. And Rohitash, you're at People's Group, People's Group work with a lot of fintechs. And things have changed a lot you know especially with you know direct participation to some of the systems and networks. So I want to know, like what are you seeing with what fintechs are asking for today and do they have any misconceptions with all these indirect versus direct participations?

Rohitash Hural: 
Yeah I think fintechs have evolved significantly over the past decade. So just five years ago even, I think fintech's role evolved just from being a technology company as they were solving a problem at the time of that last end of the distribution channel at the time, where a lot of use cases like Wise and others came up in the market to solve a niche problem. What we're seeing now is that fintechs are coming under the same supervision as the banks. So things like RPAA or direct access to networks, it changes the game a little bit where the compliance and regulatory owners are not just on the banks they're working with, but it's distributed across the value chain. So that's the change we are seeing now. And even fintechs in Canada, I think it's it's a newer trend where we putting them under the regulatory framework in the other geographies this has happened and that's why we are seeing like fintechs like Wise which were operating as a banking license in UK and etc. now they're moving to Canada and now they're coming under the same supervision. So that's the first trend uh the major trend we are seeing now.

To answer your question on misconceptions around direct participation. There are many. I think first of which is that participation is not just a badge of honor, it's a responsibility. So, like FIs have taken that responsibility over decades where they have built systems and framework in place to support compliance and regulatory rigor. What's happening now is fintechs are coming up to this realization that hey participation comes with all of this where I think it only opens collaboration more that they need to work closely with their FI partners to be able to fulfill these obligations. The second misconception there is I think fintechs want a sense of control but I think control really moves. Earlier if they were working with an FI partner now they are working with the direct regulator. So really that onus doesn't go away it just moves.

And last part is I think cost. So a lot of fintechs I think what we are seeing is going direct, they feel they can get cost or get at cheaper price. But what ends up happening is players like People's Group uh we are infrastructure provider which means by economies of scale we are able to provide at a service at a certain cost which if each participant goes may not be able to realize and I feel like sometimes it can it can it can see it can perceive that way but when you add operations regulations everything I think the cost are not that different. So, I think those are some of the misconceptions. Again, it depends on the scale of the fintech and where they are in maturity there's a lot to do.

Josh Rowat: 
I was going to say actually maybe even I was I was going to add that to my answer earlier to your earlier question is, we were a new entrant to the Canadian market but we had a lot of experience in other places so we could bring a lot of you know maybe ops risk frameworks or other things that we could rely on experiences that we had globally but when it came to things like, oh how are things being done in Canada what are the little nitty-gritties? Not to pick on Quebec but you know when it comes to the regulatory landscape Quebec can be something to be very mindful of. And a new entrance to the market definitely the partnerships help a ton with that whether it be with local law firms to help you guide you through the regulatory hurdles or or partnerships with financial institutions with what Rohitash was saying at that already have that experience well not only the experience but have already built out a lot of that and have that more or less off the shelf so to speak for you to like plug and play with.

But definitely it gets to a point where maybe you've done a great job of launching this new thing or as Karthik was saying solving for that problem where maybe now I need to be able to solve my customer problems I need to you know take a new step in a in a different direction where you know things like direct access do help potentially quite a lot. But definitely the scaling part and finding the right time to do that makes a big difference.

Olivia Tang: 
You stole my transition but that's okay because I want to dive in a little bit on the cost and we're just not talking about you know financial cost. I think cost is like compliance burden, speed to market, some of the controls that you have things that you have to trade off. So Alena, given we talk about these different options, where do you think the heavy lifts are and you think people just don't often expect that actually that's actually more complicated than you think?

Alena Scotchmer: 
Yeah, so I like to think about this across sort of two key questions. So the first one really sort of dovetails with what everyone has been saying uh on the panel just now. So this idea of how much uh in order to solve these pain points or you know this this new better mouse trap that we're building as a fintech, how much are we doing ourselves and how much do we have to rely on partnerships or infrastructure or things that already exist out there. And maybe you're talking to one of the fine folks on the stage about this in terms of how you fit in with what each of them can do. But really thinking about that as the sort of first key question and I think this was touched on a little bit earlier too when we think about legal and regulatory complexity there are things that apply to fintechs directly based on what their activities are. And then there's a whole host of things that can apply indirectly as well depending on who you're partnering with, what rails you're using, what's the medium that you're working in. And those things happen through the contractual agreements between the parties for these partnerships to make these things go. If you're dealing with a bank or a financial institution, that's going to look very different than if you're dealing with a network or, you know, the world of things that you need to to work within looks different depending on those variables. So that's the first key question.

The second one going to the idea of regulatory compliance is how much can we build internally to adequately manage those aspects of doing business and how much can you buy or outsource or rely on partners or others to do. So those are the two sort of key things that drive those conversations often for me.

Olivia Tang: 
Thanks. Karthik, from Mastercard's perspective, what do you think, what do you see for Fintechs as like the biggest surprise when they're working with Mastercard on different rail options?

Kartik Kamat: 
Great question. So, I'll expand the scope of that question to not just sort of bring in a Mastercard perspective, but just as a sponsor bank perspective as well in terms of the surprises fintechs can potentially run into, right? I's a long list, but I'll limit it to three I've seen happen quite frequently.

So, the first one is around speed versus the regulatory constraints they work under. Fintechs move fast. The investors demand they move fast. You can build an amazing front-end user experience within a few weeks, maybe even days or hours now with AI. But when you start to connect to a payment rail, it's an entirely different ballgame. To ensure that you have checked all the boxes from a regulatory legal compliance standpoint is a fairly heavy lift and that can take much longer and ensuring that you have budgeted in the time and the resources to meet that is important and can sometimes catch fintechs by surprise.

The second piece I would say is around the working relationship with sponsor banks. Now I think as was mentioned on the panel with the regulatory changes coming in Fintechs will be able to connect to some of the payment trails directly more easily. But until then at least they do need to for the most part work with sponsor banks. Now sponsor banks by virtue of having a banking license are the ones who are accountable to the regulators for all of the regulation. But at the same time when they work with the fintech sponsor banks can't be prescriptive to the fintech in terms of this is what you need to do in order to meet the regulation because it could create liability issues later. So the burden actually falls on the fintechs to look at the regulation, understand it and interpret how that fits their business model. Right? The burden falls on them to actually go out there get third-party experts around legal regulatory compliance, build out these programs and then go to the bank and say does this meet the bar that you have put. And this oftentimes is underestimated and can result in significantly heavier lift.

And the third piece I would say is operational readiness. And when you're standing up any payment rails whether it's a card or a non-card rail, you have pieces around fraud, disputes, chargebacks. You have reconciliation and settlement. You have KYC [Know Your Customer] monitoring and transaction monitoring and sort of all the checks that come after that. Like all of these pieces uh need to be accounted for, both from a staffing, like turnaround times meeting the bank's requirements that sometimes can get missed as you're building out this holistic program.

Josh Rowat: 
I was actually just going to add like I think it's changed a lot over the years and we've seen this in so many jurisdictions as well where we took the similar approach. We were always in our team, we were like okay what is the bank's expectations like how can we keep the bank happy? This is let's hey what are your questions? We'll answer all of them. We'll make sure you know to do all these things whenever you're hoping for them. And we were like, this is like just a game of we're constantly chasing like what the bank's expectations are. And we actually started to look a lot more like what their regulators are, going to push the bank on and like giving them pressure. And as things are happening, you know, maybe there's a failure in fintech and it spurs up a lot of, you know, interest from regulators.

So I think we actually changed our approach in that respect a few years ago and it really made made big difference for us with the relationship with we have with our bank partners where it was like hey we know your regulators are examining you on XY Z,. Third party risk management is so important in the last few years especially and there's been a lot of focus on that in many many jurisdictions that we've seen so I think that changing that framing as well has helped you know us as a fintech especially navigate those relationships.

Olivia Tang: 
That's great learning for fintechs yeah. It makes a lot of sense to me. Rohitash, I want to give you a chance to address what they've said.

Rohitash Hural: 
I think it's on point. What we have seen as one of the biggest sponsor banks in Canada for issuing, acquiring, money movement, access to rails. Often the most successful fintechs are the ones that are proactive and they build compliance and regulation as part of business. These are the things that cannot be delegated. So I think some fintechs take an approach that we are just a distribution channel whereas the sponsor bank can take on all these obligations for us. That doesn't work really. I think it's more about taking ownership and coming prepared. Because as Josh mentioned that what they are seeing in wise is working successfully where you have to meet the obligations with the sponsor bank that you're working with and that's really the recipe for success.

And I'll exemplify by a little bit of I know we're not talking about the Real-Time Rail but just a little bit around that is, having participation in Real-Time Rail is an investment, it's not a technology upgrade. This means there is for fintechs today, they have the choice of asponsor bank. So it's more like I can move from one to the other. But when you invest in that infrastructure then you have no choice - you are in it for good or bad so I think those are some of the important things to consider while working with a sponsor bank. I think you can change a sponsor bank, but really the regulations don't change. So, and I think that's one of the things to consider is to build compliance as part of your business and not something that can be delegated.

Olivia Tang: 
Yeah. So, I have one follow-up question on what we've talked about and I think partially Alena, you can answer that as well. It sounds to me that there's, you know, direct participation, you might have a little bit more control working with sponsor banks, you have to sort of address the sponsor bank's needs.

So I feel like that's a crucial decision point. But then I think you know with that, you also have to think about the cost of licensing requirements and the complexities you know in this decision. So Alena, if you can sort of talk about that and then maybe Rohitash, Karthik or Josh can sort of you know answer that decision point.

Alena Scotchmer: 
Yeah for sure. So I think there's you know we I always recommend really thinking about it upfront as much as possible like really uh testing the MVP [Minimum Viable Product] and thinking about what are the possible permutations of of addressing some of these things and really how much should we do as as you know looking at it as we're part of a collaborative experience here if we're we're you know not operating in a silo we're relying on partnerships and that sort of thing. Like what do we need to bring to the table as being a fintech here.

Obviously, our system relies on trust and collaboration and partnerships. That's just the table stakes for operating here. So, if we think about regulatory compliance within that lens, I would say, just to watch out for those possible surprises are, you know, the provincial complexities that exist. So, anything related to prepaid cards, there's Quebec out there, those some of those provincial things where you're not just looking at one federal place where everything lives together but you're looking at 13 different things at once.

And the other thing to think about is standing up an AML compliance program which I think you mentioned earlier Rohitash as well. So the possible complexities there. But again thinking about how can we really build this into our processes, how can we address this as part of the MVP dealing with it on the ground level so that when you come and have those conversations with partners, you're prepared for those conversations. I think that's what I would recommend.

Josh Rowat: 
Yeah, I'll just add to it. 've heard a lot and I was part of the RPAA's like pilot, you know, group and committee and I wouldn't lie, I was very surprised to hear from a lot of Fintechs or peers in the industry that were like, "No, now we have to do end-user safeguarding. That's crazy." And all and I sat there quietly thinking, "Wait, what are we all doing today?" Like I thought like I know it wasn't prescribed, but surely everyone's doing safeguarding. So I think like you were saying it there I can understand it can seem like there are more hurdles and more barriers and more things for you to to set up and figure out but I actually think it's it's really great that we have the RPAA now because a lot of what the Bank of Canada was doing or maybe FINTRAC was enforcing was a lot of you know these sponsor banks or these networks were having almost to play the role of regulator themselves to make sure okay like if no one's asking you this, OSFI [Office of the Superintendent of Financial Institutions] is going to expect me to at least ask you this.

So I think it helps to have these regulatory frameworks that help show and I know it's still early days especially for the RPAA but to show to to sponsor banks or partners that, hey you don't have to take my word for it or even maybe if I find an external auditor to tell you that I have everything I should have, you can take the bank of Canada's word for it. They've examined me on these few things and they said that I have a clean bill of health so you should feel confident and then your regulators will also have a knock-on feel of confidence. So I think it's going to be a real launch pad to helping a lot of fintechs. You know it is a bit more work on day one. There are partnerships, there are ways to work through it, but once you have gotten that in place, you have that business as usual practices that keep the network safe, keep consumers safe at the end of the day, you've you've kind of got that foundation to go at it.

Rohitash Hural: 
I can address some of that and I think you have a good point that RPAA was indeed a good regulation to bring a lot of fintechs that sense of seriousness and responsibility for the funds that they hold. But at the same time I think there is infrastructure players like People's Group who provide a lot of that rigor and support to the fintechs. And depending on the stage where the fintech is at to ask a question around cost and complexity I think there is definitely a need for the place in the market where they can leverage some of this knowledge, which are which comes with the sponsorship model and be able to take that and probably as we have seen a lot of fintechs they will start small grow and then they will mature and some of them will get banking license and do the same exact thing that they were resisting. So I think it's good to open up and what I see is a more collaborative environment where fintechs no matter what scale at any point start thinking that way. But also the conundrum of velocity and speed where I think sponsor banks can learn from velocity. So there is a healthy middle ground here where sponsor banks need to act a little faster, regulations need to act faster, fintechs can take some of those regulatory things more seriously. So I think there is that velocity versus like regulation slowness is key in success.

Kartik Kamat: 
Awesome. So I don't want to repeat what has already been said so I'll slightly reframe your question which is, how should fintechs be thinking about or what are the key questions fintechs should be thinking about as they approach this payment landscape? And as I think of that question I think there are three or four things that jump out.

The first thing and this is a bit technical from a payment standpoint but we're all payment nerds here. The first is sort of trying to decide between when they're trying to decide between payment methods is the trade-off between speed of the payment and certainty of the payment. Right? What I mean by that, let me take an example. You have e-Transfers and you have EFTs. Exactly the same thing happens across both. You send account to account money movement from account A to account B. But there is a lot of difference in terms of the kind of information you have about the recipient across these two channels. The time it takes for the recipient to actually receive the money and the time it takes in the back end for the settlement to happen, right? And so those kinds of decisions based on what customer pain point you're trying to solve becomes important.

The second piece is scale. The kind of payment methods you use when you have 5,000 customers will be different compared to the kind of payment method you need when you have 500,000 versus 5 million customers, right? It can be driven by the cost of the payment method. Do you go direct versus not? So a lot of these factors come into play as you scale. And are your payment rails that you're selecting do they scale with your growth as well?

And then, the third piece that I will say and Alena I think you mentioned before is the decision to build or partner. Now with RPAA that gives fintechs the opportunity to potentially connect directly to some of these rails. It gives you more control if you do that but at the same time it will be more costlier. It will take longer. And do you have the scale that justifies it or do you partner with sponsor banks to connect to the payment rails.

Olivia Tang: 
Rohitash, what are the key questions you think fintech should be asking from a sponsor bank perspective?

Rohitash Hural: 
I think the one key thing is to understand their role in the value chain overall because there is end user there is a business there is likely a payment facilitator or payment processor then there might be a payment aggregator then there could be a FI [Financial Institution] then it could be connection service provider and then there's a network.

So I think as we are going into the data-rich payment role as in ISO 20022, we have to realize that each of these entities can now be mapped. Earlier that choice didn't exist because we didn't have data-rich payments which means among these various service value chains, what is the role that fintech wants to play? And I that that comes with identifying the niche problem that they're solving because not everyone can be a payment aggregator which by opening participation happens to be the case. Everyone wants to be a connector but is payment core to your business right and that's where the real value lies.

I think asking that question there's a lot of things on the menu it’s like a buffet. So you have so many things to pick from so it's important to realize the sequence of what problem you're solving and which place you want to play in. I think that's really crucial because just having all the participation might not solve the problem. If anything, it can create more problems. So I think the biggest question is what pain point are you solving and building those core experiences and leaving some of the infrastructure and operational work to someone else like People's Group like who are in this space who can help uh the fintechs.

Olivia Tang: 
Alena do you see that in your space like what do you typically ask the fintech when they come to you for advice?

Alena Scotchmer: 
Well, the thing about fintechs is that there's such a huge range of business models and approaches. So, a lot of the time, thinking about some of these key questions, the conversation often turns to, how many resources do we have internally to deal with this?

But it's not only resources internally. It's like you have to think about resources extremely broadly. Like who do I know out there who could potentially help me with this? Either from a partnership perspective, from an external service provider perspective, thinking about new ways to approach these questions internally as well. I think it's really important to think about one's resources broadly in this way. It's going to be a very different conversation for a fintech that's maybe active in other jurisdictions where it may be already regulated elsewhere versus a brand new Canadian startup. Thinking about the number of employees and other resources around within the organization is very different depending on who you're talking to. So, I think just really having a good handle, being resourceful, being open-minded, and having a lot of conversations like this, I think to really think about what that looks like in a particular fintech context.

Olivia Tang: 
So, Josh, you're Wise fintech. So, do you think like I mean with so many options, how do you think about you know sequencing of you know what rails to add on, where to start first, or you know, or maybe even like if you had if you have the choice to do it all over again, would you do it differently?

Josh Rowat: 
Well, it's a good question. I think if we were to do it all over again after entering into Canada, everything that we already touched on, you have to set yourself up with the local licenses, the regulatory requirements, making sure that you're being compliant with the local laws. And we have done that. We did that in a lot of countries and especially when we started off we were much smaller, fewer number of employees um and and fewer number of customers and now we're globally around 16 million active customers. We have over 6,000 wisers in-house solving on this and many more externally that also help solve this problem of moving money and staying compliant. So I think it's definitely that journey of like and like the others have touched on is like where are you? What's your experience?

And today I think we have eight direct connections around the world and it goes back to you know solving that customer problem is, okay we want to go to market the fastest. We want to be able to not solve everything on day one but that's definitely where maybe partnerships can work faster to solve for that and and and then we have evolved in many of these jurisdictions towards working to get direct access. We were the first in the UK, the non-bank, to get direct access to the faster payment scheme. Steve, who's in the back of the crowd, actually worked on this many many decades ago. And so I think we've seen that evolution across each of the markets. I think having that regulatory landscape really helps to open up the option for fintechs that you can work on a partnership, but then if the day comes that it makes sense for you, but as Rohitash was saying, it's a lot of effort. There's a lot of costs involved for you to be able to justify, you know, building this out.

And I think we eventually got to that scale and especially as we're starting to solve for large corporates and other FIs, you know, the likes of Morgan Stanley or Google Pay. A lot of the investments we made to make the app and the experience the best we could, we've been able to extend this to the likes of, you know, these large FIs and corporates for our APIs and provide that infrastructure and options to them.

And we we were actually chatting about this at Natcha last week as well in San Diego where it's it's this controversy of having all the options or or trying to make it as simple as possible and and even when it comes to the payment options that we've been touching on in Canada and in many other jurisdictions, they are so many options and touch on it might be alias-based routing or QR codes or just simple routing number and account number.

It can be quite overwhelming even if you are the best designer in the world to show this interface for your customer of like, how do you want to send this 50 CAD. So we've more recently if I'm honest been on this journey of okay we built out all these integrations we have all these partnerships in some cases we have these direct connections. How do we present this to our customer in the simplest way possible where you know maybe we give them all the options the first time round, but the next time they want to do the same thing, we kind of default or automate to what they previously set. So, I think trying to simplify the journey and make it easier for customers to send money or receive money at the end of the day is now like the next problem for us to solve.

Alena Scotchmer: 
I think your point about the options was a very good one. So, obviously, there are so many options out there in terms of what a fintech can do and what you can offer. One interesting way to kind of flip that around and think about it is there are many variables that could potentially add complexity. If you're thinking about rolling out in Canada, dealing with our landscape, our compliance, all those requirements, there are many variables for you to play with, more than you might think at first glance. So, does your phase one, does it make sense to offer all of the options on phase one? Does it make sense to limit the geographies potentially within Canada to roll out for phase one. There are a lot of different variables to play with that kind of add some more options.

Josh Rowat: 
And we actually had that as well and it can be frustrating at times because you want to build the best thing or give all the options. Today Wise, 75 per cent of payments end-to-end are under 20 seconds. 75 per cent. In Canada, our outbound payments today are 0 per cent instant, and that's not because there aren't the options. There is e-Transfer already today. There's the RTR [Real-Time Rail] that's coming. It's really exciting. There's other ways through the networks to send instantly. But we didn't — we didn't prioritize that because we were trying to prioritize first our customer problems, the coverage, the use cases, and then we can start chipping away at okay, let's make it faster, let's make it cheaper, let's make it more convenient.

Rohitash Hural: 
I'll build on that a little bit. So I think what payments are a means to an end and not the end itself. So what that means is that payments are solving a problem which might exist. In Wise's case, it was cross-border which was very expensive at the time and I think that's how we need to really look at the payment economy is what are the overlays on top. Like so when prepaid issuing which was championed by People's a long time ago really changed the game for underbanked. In the economy where a lot of people might not want to open up a bank account with a traditional FI. So when prepaid issuing became popular and now it's popular with a lot of fintechs, it solved a crucial need in the market. And same with e-Transfer as we launched a request to pay it solved a need in the market where there was a new way to pay for any business or purchase that you're doing which was embedded in the system itself.

So I think a lot of that has to do with, yes payments solved, but the need was what payment was solved. And oftentimes it's not just about speed. It's really about what needs to be done. Yes, if you have to pay a bill faster, today it takes 3 days. I would love for it to be done within seconds so I don't have overdraft and interest on it at which point payments matter. Sorry, the speed matters. But then there is underbanked, the speed matters there? Not really, because there is a different method that can solve that problem.

So I think it's really about payment is still a means to an end and we are all missing a lot of like overlays but we are seeing some fintechs who are really solving those those niche problems. And I think that's where the success in the long-term will lie in terms of building overlays on top of the RTR. The RTR is just an infrastructure for example, right? But what fintechs will do with that is because to a person on the street, even today a customer, they don't care whether it's the RTR or e-transfer or how they are getting paid. So unless something — someone changes something for them, it won't apply. To small businesses and big businesses, yes, there is a need for liquidity and cash management that will be solved, but for the end customer, unless there is an overlay experience which can really change it, we won't move the dial.

Olivia Tang: 
I really like that. It seems like you're saying not looking at the RTR as you know another rail is another option but how you use it to further support or enhance what you have today. I think that's really interesting. So two last questions for everyone in our panel. What is the one key takeaway you wish the audience to have and then the second part is what is the next thing that fintech should consider in the future because things are going so fast. So like what should they be watching out for next?

Kartik Kamat: 
I'm happy to start. So look first of all I am incredibly excited about where we are today from the Canadian payment ecosystem. At the keynote this morning you heard Susan Hawkins from Payments Canada indicate that the Real-time Rail is undergoing testing, expected to launch in Q4 if everything goes well which is great news. So essentially it presents a lot of different options to fintechs. But with a lot of different options comes great responsibility as well right in terms of operational readiness ensuring that they are meeting the regulatory and compliance requirements and ultimately building trust. Without trust there really isn't a business in financial services.

Olivia Tang: 
Alena or Josh?

Alena Scotchmer: 
Sure. So, I guess uh to answer your first question, I would think about it in the way that there are so many options. There's a lot of complexity. We have all these new developments coming that constantly sort of reshuffle our deck of cards. We're all just sort of constantly on a learning curve in many ways and trying to navigate all of that together. But I think there are still so many customer pain points or things that could be improved. I think there's still so much opportunity within our landscape for folks to come in and really build new solutions to things.

Rohitash Hural: 
I think um I can take that one for — I can answer a question on what to look forward to. I think there's a lot of innovation happening in payments itself and I would miss the opportunity if I didn't mention agentic [payments] and stablecoins of course. However, I think agentic payments and just generally an agentic economy is one of the big things that I think people are not going to miss regardless.

But again, one of the things is how can it make — how can we make it — how can we break it down for the end users and customers and mainly small businesses in the value it brings. So I think something like agentic commerce needs to have that voice and those experiences built in when we are launching that. Because I think Canada is a unique economy and oftentimes what happens is we look at other geographies and emulate some of that stuff. But while we have the opportunity, I think we can create something here itself which is uniquely Canadian. So I think that is one of the key takeaways that we should focus on.

Josh Rowat: 
Yeah I guess everything that everyone already said but I think I think that's where I'm really excited for you know as I saying like I know compliance and regulatory framework isn't the sexiest thing in the world but I do think it's going to be that foundation to help what Ro [Rohitash] was saying all of the innovation and and I think help support a lot of partnerships and and make it easier to to bring bring those to to fruition.

And I think you know it works both ways. These fintechs in Canada that are building these amazing products can start solving and partnering with banks to help them solve their problems as well. So I think it will end up going both ways which is really exciting where you know fintechs are using sponsored banks to help solve for many of the problems that the team were just sharing but you know it will work the other way around as well where banks will start partnering with fintechs as they already do today frankly to help solve for a lot of what the banks trying to solve for. And I think things like the RPAA, you know, the improvements that will come to FINTRAC, new agencies Canada will help, you know, that third-party risk management and help give banks more confidence when partnering with a fintech versus maybe in the past it was a bit risky or a bit scary to make that happen. And so bringing more improvements, innovation, more competitive landscape and at the end of the day, the real winners will be the Canadians, the consumers, the small businesses, the corporates that are all behind the scenes actually using these features or this functionality. So yeah, very excited for all of that.

Olivia Tang: 
Sounds great. Okay. Well, thank you very much. It sounds like there are many choices out there. There are many options. I t really — it depends on where you are, what you want and you have to spend some time to, you know, ask yourselves those questions and then think about the path forward. But thank you very much for our panelists today. I think you guys—I hope you guys enjoyed the session and found it helpful. So thank you very much. Thank you.

Elizabeth (Liz) Dempsey:
That’s a wrap for this episode of The SUMMIT Summer Series.

We want to extend our sincere thanks to our moderator, Olivia Tang and our panel of experts – Rohitash Hural, Kartik Kamat, Josh Rowat and Alena Scotchmer – for sharing their payment expertise with us today.

As they discussed, ultimately, the most successful payment solutions start by identifying a clear customer pain point and choosing the right mix of rails to solve it. And, as new frameworks like the Retail Payment Activities Act are now in full force, compliance and end-user safeguarding are the very foundation that builds trust and unlocks innovation.

If you enjoyed this episode, please subscribe to The PayPod on your favourite podcast app. We’ve featured lots of great conversations throughout this series, so please be sure to go back into the archives!

And finally, don’t forget to take advantage of our lowest possible ticket price for The 2027 SUMMIT, available to listeners of The PayPod using promo code SUM27PAYPOD when registering on thesummit.ca.

I am your host, Liz Dempsey. Thank you for listening to The PayPod.

Until next week!