March 24, 2016
A vision of the Canadian payments market from a world payments leader
Recently, Toronto-based Rakuten Kobo Inc., one of the world’s most innovative eReading companies, cut a deal with global payments provider Worldpay to manage its online payment processing and acquiring in Canada. Rakuten Kobo had been working with Worldpay in the US, Europe and Japan.
The contract brings WorldPay’s portfolio, including acquiring, gateway, alternative payment methods, fraud and risk management services, to the Canadian market. The partnership is supported by Peoples Trust Company, Worldpay’s Canadian banking partner.
Payments Business magazine talked exclusively with Worldpay’s Casey Bullock, SVP, Relationship Management, North America about his view of the Canadian market, why they are moving into the country, and how his world vision of the payments landscape now includes Canadian perspective.
PB: What particular challenges do you anticipate in the Canadian market?
As Canada’s eCommerce market grows steadily the dominance of credit cards is expected to weaken significantly. Like many other markets around the world, the rise in smartphone adoption and mCommerce means consumers are starting to use digital wallets in place of credit cards when shopping online. This isn’t necessarily a challenge for us, but it does mean our customers need to consider the changing consumer preferences and adapt their ecommerce experience accordingly.
There are a growing number of players entering the eWallet space from tech companies, banks, and even individual retailers like Starbucks, but consumers are more concerned with convenience than choice. People don’t want to have to keep switching between different eWallets, and are unlikely to have more than two different types. The next few years will see consumers dictate which players come out on top and they are likely to be the ones that offer the most convenient experience with smooth authentication and are wide acceptance from retailers.
PB: How does the Canadian market compare with other international countries and their payments culture?
While Internet penetration is high in Canada, the eCommerce market here remains relatively small compared with similar countries. eCommerce is growing slowly and steadily at around 12% per year, and interestingly we see an emphasis on mobile usage rather than desktop from Canadian consumers. Also, despite the predicted growth in eWallets and other alternative payment methods, credit cards are still king in Canada making up over 60% of all eCommerce payments in the country. Canada is also notable for having the highest proportion of cross-border retail – with 75% of Canadian shoppers purchasing from US websites.
PB : How important was the deal with Rakuten Kobo Inc in leading Worldpay to expand its investment in Canada?
We launched a tech office in Montreal back in 1999 and we now employ over 100 people in R&D, software engineering and development and product design for our global customers. With our launch in the Canadian market allowing us to process payments for Canadian companies like Rakuten Kobo, we’ll continue to invest in Canada as demand for local technology services grows.
PB: Does Worldpay expect to open additional offices across the country, beyond the technical group in Montreal?
At this stage we don’t have any plans to open additional offices but we recently expanded our Gateway development team in Montreal, and as demand for local technology services grows we will look to do the same.
PB: Are there particular vertical markets or types of companies (e.g. SME, retail, franchises, ecommerce firms, etc) which are more desirable targets?
Our customers tend to be large and fast growing internet-led multinationals with complex payment needs. In Canada we are focusing our efforts on industries where we have proven expertise including airlines, digital content, video games, travel and global retail. We already work with Canadian merchants looking to sell their products to overseas consumers, and also with international companies wanting to extend their reach to Canadian consumers. Our customers are the types of eCommerce businesses who already operate in many markets, or those who want to scale up and swiftly enter new markets.
Worldpay is a leader in global payments, processing millions of transactions every day. We provide an end-to-end service including card acquiring, treasury, gateway, alternative payments and risk management, all of which can be provided with a single integration to Worldpay. We make global payments simple for many of the world’s leading organisations. Peoples Trust Company is a financial institution headquartered in Vancouver, B.C., with offices across Canada. The Company is active in originating and servicing mortgages, with over $6.2 billion in assets under administration, and offers very competitive deposit products. Peoples Trust, through its subsidiary Peoples Card Services, is a pioneer of prepaid and credit card programs in Canada, and a market leader in both reloadable and non-reloadable card products of Visa and MasterCard.