Shopify is partnering with United Kingdom (UK)-based FinTech startup Volt to offer open banking capabilities that Canadians can’t take advantage of amid seemingly endless delays in implementing this country’s open banking framework.
As part of this partnership, Shopify merchants across Europe and Brazil can offer Volt’s “pay-by-bank” checkout solution, which allows customers to settle funds almost instantly with real-time account-to-account payments.
“Unless something dramatic changes, Canada can expect to be relegated to the sidelines within 10 years.”
According to Volt, which provides open payments systems in the UK and Brazil, this integration with Shopify will also be extended to additional countries over the coming months, namely Australia in the fourth quarter of this year.
“Open banking is experiencing hockey-stick growth around the world because it’s faster, easier and more secure compared to incumbent payment methods,” said Matt Komorowski, Volt chief revenue officer, in a statement. “It’s a digital solution for the digital age, and we’re delighted to be bringing it to Shopify’s impressive merchant base.”
Neither Shopify nor Volt made mention of launching this feature in Canada (BetaKit has reached out to both companies for comment). Notably, the solution is only available to countries that have regulated open banking frameworks, where Canada lags behind.
Canada is currently developing a real-time rail (RTR) system meant to modernize the country’s core payments infrastructure, allowing for payments to be sent and received within seconds. This is made possible through an open banking system, which allows financial data to be shared between banks and third-party service providers, such as FinTech startups.
The progress in implementing Canada’s RTR system has been sluggish, however, with the initiative being delayed several times.
Payments Canada, the organization leading Canada’s RTR efforts, announced yet another delay in implementing the system on Tuesday. The system was initially slated to launch in 2022, and was delayed to an intended launch in mid-2023.
In a statement, Payments Canada attributed the setback to “current delivery delays, unrelated to the exchange technology components.” The delay announcement also coincides with the initiative’s second review in recent months.
Who is running this thing?!? Like who is the single threaded owner here?
— Harley Finkelstein (@harleyf) June 13, 2023
As the future of the RTR system gets blurrier, and no open banking update in the recent federal budget, leaders in Canada’s FinTech sector have become increasingly jaded regarding the prospects of open banking becoming a reality in the country.
When reached for comment on the most recently announced RTR delays, Koho CEO Daniel Eberhard noted that Shopify and Volt are unlikely to attempt offering a similar solution in Canada because the framework still isn’t in place.
“The most pernicious payments myth in Ottawa is that competition is somehow opposing systemic stability,” Eberhard told BetaKit. “There is not a single Canadian company that could have competitively bid for this work. Unless something dramatic changes, Canada can expect to be relegated to the sidelines within 10 years.”
