OTTAWA — A senior Bank of Canada official says modernization of the country's core payments infrastructure is long overdue amid the rapid advance of new technologies — and the risks that accompany them.
In prepared remarks of a speech, deputy bank governor Sylvain Leduc says the system must be able to keep up with new payment options that, in recent years, have included innovations like PayPal, e-transfers and Apple Pay.
Leduc says keeping payment systems up to date is needed to shore up financial stability and to address credit, liquidity and operational risks that can arise — and can even come in the form of a computer glitch.
He says the retail payments system of the future must also be designed to allow enough openness to allow for consumers' expectations of fast, efficient payment options, like PayPal.
A worker demonstrates wireless payment using the Samsung Pay app on a Galaxy smartphone in Barcelona, Spain, on Monday, Feb. 27, 2017. (Photo: Bloomberg via Getty Images)
Leduc says if the system fails to stay up to date with these innovations, consumers may choose to adopt alternative, potentially unregulated forms of payment, that could eventually pose risks to the broader economy.
He says Canada's existing payment systems are showing their age and he credited Payments Canada with undertaking a plan to modernize them.
"Modernizing systems when technological advances and other changes in the payments environment are occurring at such a fast pace is not only challenging, it is potentially paralyzing,'' Leduc said Thursday in his prepared speech, to be delivered in Toronto.
"However, we all know that inaction is not without costs. More importantly, the modernization process provides a truly amazing opportunity to reshape an essential part of our financial infrastructure for the benefit of all Canadians.''