The Canadian payment network Interac can call its diversification efforts a success.

Interac e-Transfer's P-to-P usage is on pace to reach $90 billion in 2017, up from $63 billion in 2016. By comparison, the U.S. banks' Zelle e-transfer service processed $55 billion in 2016, and PayPal's Venmo processed about $25 billion during the first three quarters of 2017.

"For a country of 35 million people, $90 billion is pretty significant," said Debbie Gamble, vice president of product and platform at Interac Association and Acxsys (which operates Interac e-Transfer). "We're benefitting from ubiquity; we're available in most of the country."

Interac's Debbie Gamble
Interac's Debbie Gamble

Interac e-Transfer is supported by most of Canada's financial institutions; and has flourished as mobile transfers have taken hold in a country that's accustomed to making digital payments, Gamble said, adding mobile contributes to an annual expansion rate of about 50%.

Interac works similar to Zelle and other transfer networks. Users send money to each other via their e-mail address or mobile number. Interac e-Transfer started with basic P-to-P transfers but as the service has grown in usage and reach, it's enabled Interac to add features.

"Any network with lots of consumer and/or bank participation is a good launchpad for additional services," said Rick Oglesby, president of AZ Payments Group. "It’s only a matter of time before they offer payment services at the point of purchase, such as Venmo. This is why payment networks are getting so actively involved in P-to-P. If they can dominate P-to-P they can continue to dominate the point of purchase, but if they don’t dominate P-to-P, then they are at risk of having new competitive entrants that will target their core businesses."

As Interac e-Transfer has grown, its use cases have grown beyond P-to-P to include rent and bill payments, and some of its participants have begun to slash fees.

This past fall Interac added a feature that allows users to request funds. A second feature added in the fall, Autodeposit, supports payments directly to bank accounts without having to answer additional security questions or sharing financial information. And at the end of November, Interac entered into a collaboration with MoneyGram to support payments sent through MoneyGram's service.

There's a business payments play, since Interac e-Transfer's bulk disbursement supports an automatic file transfer to send multiple payments in a single file upload, eliminating cash handling and check reconciliation. Another Interac e-Transfer partnership announced at the end of November, with Nanopay, supports real-time settlement across different currencies for high-volume remittance corridors, such as between Canada and India.

"These announcements are about a continued innovation of the e-transfer platform to add new features for the Canadian market," Gamble said.

Other P-to-P networks are expanding off of their core mission. Zelle has added insurance payments to its transfer rails; and PayPal is bringing Venmo into brick and mortar stores.

"There are certainly aspirations to use Zelle for business-to-consumer and government-to-consumer transactions as well," said Sarah Grotta, director of debit and alternative products advisory service at Mercator. "Some of the use cases include rebates and refund disbursements, insurance payouts and in the government category, emergency relief payments."

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