Current debit acceptance rules require Canada merchants to have consistent online connectivity to accept payments, making the method impractical for some high-volume, time-sensitive transactions, such as public transit payments or more concrete – paying bus fares.
The new Rule E5 is designed to address this, offering flexibility through delayed authorisation, which removes the requirement for immediate online connectivity. This means a merchant can opt to provide a service before a payment transaction is authorised.
Canada public transit payments
The new rule was brought in with public transit in mind but Payments Canada notes that it enables other use cases, such as parking meter transactions, vending machine purchases and buys made onboard trains and planes.
As with other Canadian debit transactions, payments in these new scenarios will still be cleared and settled via Payments Canada’s systems.
“We know Canadians want easy, fast, digital payment options and fewer and fewer are carrying cash,” says Andrew McCormack, CIO, Payments Canada. “Modernising the rules framework for payments in Canada will enable merchants and service providers to deliver on these evolving consumer needs.”
Data from Payments Canada’s annual Canadian Payments Methods and Trends Report reveals that debit card use continued to outpace cash in 2018, where Canadians used debit cards for nearly 35 per cent more transactions than cash. Canadians are also now using their debit cards more frequently for their everyday lower value purchases and this trend will only continue with changes to the underlying rule framework.
“Interac welcomes the adoption of this new rule which will support acceptance of debit in a broader range of settings including transit fare payments,” Kirkland Morris, Vice-President, Enterprise Initiatives & External Affairs, Interac Corp.“Millions of Canadians already use Interac Debit to securely and conveniently pay everyday; by expanding the ability to pay with debit, Interac is focused on ensuring Canadians can pay how they want, where they want and with their own money.”