Calgary-based Neo Financial is the latest Canadian FinTech to gain access to Interac’s payment rails responsible for e-transfers, giving it more control over payment options for customers.
Interac, Canada’s main debit and digital payment network, announced this morning that Neo had joined the Interac e-Transfer platform as an official participant.
Co-founder Jeff Adamson says the designation gives Neo more independence and the ability to add new payment features on top of Interac payment rails.
Though Neo customers could previously send and receive e-transfer payments with an Everyday account (Neo’s chequing account offering), co-founder and chief commercial officer Jeff Adamson told BetaKit the designation gives the company more independence and the ability to add new payment features on top of Interac payment rails.
“Being a participant means that Neo now controls how we build on Canada’s core payments network,” Adamson said. Instead of having to move money and build features through an intermediary, Neo now has direct access to the payment rails.
Toronto-based Wealthsimple became the first Canadian FinTech to join Interac’s e-transfer system in 2023, under expanded access guidelines. Previously, only federally regulated banks or provincially regulated credit unions could take part, and Wealthsimple had to pay fees to a banking partner to access a limited version of the system.
Interac is Canada’s main payment rails provider that connects more than 300 financial institutions and processes over 18 million transactions a day. It’s owned by a collection of banks and credit unions.
In September, Interac expanded access to its e-transfer service to include payment service providers (PSPs) that registered under the Retail Payment Activities Act (RPAA) and as a Money Services Business (MSB) with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This opened the door to Canadian FinTechs, many of which were being minted as official PSPs by the Bank of Canada, to directly join the system if they met “technical and operational requirements.”
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Adamson said Interac was “great” to work with and lauded the collaboration across regulators, particularly the Bank of Canada, which now oversees PSPs, including many FinTech companies.
“It’s definitely a positive movement in the right direction, along with the movement we’re seeing on open banking and real-time rail,” Adamson said. The federal government has pledged to implement its long-awaited consumer-driven banking framework this year and roll out a Real-Time Rail, a modern instant payment system.
Founded in 2019, Neo says it has a customer base of over one million users and offers financial products like cash accounts, credit cards, and mortgages. The company has raised more than $650 million CAD, including debt and equity, and was valued at more than $1 billion CAD as of its Series C deal in May 2022. Its November 2024 Series D raise—reportedly led by Chinese investor Tencent—reduced its valuation to $510 million USD post-money, according to The Globe and Mail. However, a $68.5-million equity raise this year was reportedly raised at a higher valuation.
BetaKit’s Prairies reporting is funded in part by YEGAF, a not-for-profit dedicated to amplifying business stories in Alberta.
Feature image courtesy Neo Financial.