Why payments are the centerpiece of Canadian fintech

The Canadian fintech landscape is very often overlooked as it’s not really a hub for some of the most popular companies to have been created in the last decade or so.

However, the company hosts hundreds of educated and skilled entrepreneurs in the fintech industry and does not seem to reduce its commitment to developing the sector even further.

Many experts have already noticed that these Canadian fintech companies are usually oriented on the payment systems rather than any other specific fintech industry such as loans or banking.

In most cases, one would find a new eWallet being developed or being launched nearly every year.

Payments in Canada

When compared to the United States, Canada is in a much better financial situation for the long-term. It can be said that the country is in its development phase and is being built as we speak, therefore there is much more growth for the future.

Furthermore, the “almost northern-most” country is becoming extremely friendly with the Blockchain technology and is gearing up to be one of the largest hubs further in the future.

Although at this point most of the cases targeting cryptocurrencies are simple Bitcoin ATM operators that don’t really translate into fintech. Regardless of this setback the country is starting to implement much of the technology in various sectors, including education.

The demand for decentralized payment platforms and instant processes is growing even faster as China starts to look for alternative countries to export its goods to. Since the trade routes to the US have already been practised quite often, the Asian giant may see large returns in rerouting the merchants towards Canada, where a large number of Chinese nationals are currently located as well.

In order to accomodate this demand, local fintech entrepreneurs are finding more and more ways of providing payment methods to local merchants so that they can circumvent some barriers from already existing popular eWallets like PayPal or Skrill.

Fueling the nation’s habits

Another thing that most foreigners may not be aware of Canada is the prominence of its gaming market and how fast it has started to grow over the years. The very restrictive laws that govern the USA, prompt American gaming enthusiasts to cross the border and have fun at the Vancouver or Toronto-based venues.

However, the Canadian online casinos are also benefiting from offering their services to US-based customers. The only issue is that PayPal, Skrill and even Neteller, the largest eWallet companies and the go-to options for gaming payments prevent payments to Canada-based gaming companies, which is also a large reason why so many startups are trying to target the payment industry.

The most successful case we can study about a Canadian online payment providing company is Payfirma, which has a business model directly modeled around PayPal’s but with a few twists and innovations here and there.

Payfirma was first established in 2010 and took the hard task of allowing locals to make payments pretty much anywhere and anytime. Thanks to their recent growth, the company has been receiving quite a lot of US-based customers as well, which helped them connect the dots a lot more naturally between US customers and Canada-based gaming websites.

This was a major boost for the local companies, as they’re prevented by law to offer their services to the Canadian population, which massively diminishes their profit margin.

The initiation of the Payfirma project was a display of what fintech can actually solve even in one of the most developed countries in the world.

Is crypto catching up?

When speaking about fintech, cryptocurrencies are definitely somewhere around the corner as well, and the topic of this article simply cannot ignore them.

The only real issue that cryptocurrencies will be facing in Canada is their predominantly anonymous nature. The Canadian government, although much more lenient compared to others, still considers payment tracking and verification a serious topic of concern.

Circumnavigating the nation’s digital payment laws will do nothing but paint the fintech industry in a bad way. Due to this restriction, the blockchain companies in Canada are a lot more careful about not tampering with local laws, which explains why most of the country is littered with Bitcoin ATMs compared to cloud-based payment systems that the blockchain is known for.

Overall, Canada has quite a lot of options in their hands. The fintech landscape of the country is being developed as we speak, and more and more skilled labor is being funneled into places like Ontario and British Columbia.

The longer such a sentiment around digital payments remains, both fiat and crypto payment solutions could boom in Canada in the nearest future.