TORONTO–Credit Union Centrals in three Canadian provinces are joining with IBM Canada in a more than $100-million deal for a new payments system designed to meet the growing demand for digital payments.
Prairie Payments Joint Venture, formed by the Credit Union Centrals of Alberta, Saskatchewan and Manitoba, was created to administer and manage the IBM contract. It collectively represents more than 75 credit unions across the three prairie provinces The contract is to run for eight years.
"Credit unions have always been innovators. From being the first to offer debit card services, ATM banking, to mobile pay and mobile banking, we know how critical it is to move faster with our payments products and digital experience offerings," said Michael Devlin, CEO of PPJV, in a statement. "Changes are happening across the payments industry, such as open banking, and companies outside the financial sector entering the market with new credit cards and cryptocurrencies. All these changes promise a new era of transparency, but also increased privacy and security challenges. To keep pace, the need for payments modernization for credit unions has never been greater. We are happy to be working with IBM Canada on this initiative."
Onboarding of credit unions is expected to begin in the fall of 2020.
The Trend Line
In making the announcement, the credit unions pointed to data showing digital payments increasingly dominate payments over cash; 73% vs 21%, according to Payments Canada's annual Canadian Payments Methods and Trends Report, released in December 2019.
"The dramatic movement we are seeing with payment modernization is in response to the demand from Canadians for frictionless interactions, but also better privacy, security and speed," said Dave McCann, managing partner, Global Business Services, IBM Canada. "By hosting its payments platform in the cloud, we will ultimately enable onboarded credit unions the flexibility to rapidly innovate new digital member experiences for businesses and members across all payment types in a more efficient, safe and resilient manner."