MAG Insights

Announcements from the MAG & Featured Articles

International Perspective: Contactless in Canada and Biometric Authentication (MAG Quarterly- Volume Four, Issue Two)

By Catherine Johnston, CEO, ACT Canada

June 2, 2016

I’m often asked why there is so much contactless acceptance in Canada.  You would have to go back to when it all started to understand how it evolved.

We faced the traditional chicken and egg scenario: would cards or terminals be deployed first?  EMV had prompted the rollout of new terminals to read the chip cards that were replacing mag stripe.

Major terminal manufacturers made the first move, deciding to provide dual interface (contact + contactless) terminals, even though there was every indication that only contact cards would be deployed in the early stages.  When I asked why they made that decision, I was told that it was a leap of good faith, paving the way not just for contactless cards, but also for mobile payment at the POS.

Indeed it was contact cards that were deployed initially, with a 3 year replacement cycle.  Before the 3 years were up, most financial institutions decided to take advantage of the availability of the contactless terminals and re-issued cards with both contact and contactless capability.

And that, dear reader is how Canada moved into contactless acceptance.  Merchants paid nothing more for dual interface terminals.  Issuers did pay more per card to add contactless and terminal manufacturers paid more to certify the dual interface devices.  It should be noted that merchants do have additional costs related to managing the additional certificates currently required for contactless.

Now on the authentication front…

ACT Canada is encouraging merchants and acquirers to consider the implications of biometric authentication, both online and at the POS.

It makes sense that payment networks would look to biometrics to increase payment security.  It also makes sense for merchants and acquirers to get in front of this matter by understanding how it might impact you and your customer.  Then merchants can help other payment stakeholders understand what would or wouldn’t work for you.  There is time for discussions before decisions are made if we move now.

Everyone wants secure and fast payment as well as a great experience for the cardholder/shopper.  That can happen when payment networks, merchants, acquirers/processors and suppliers all work together in the early stages.

On June 15th, merchants and acquirers are invited to a workshop at Cardware to look at this.  It starts with a briefing on the different biometrics.  A round table discussion will then identify additional questions that need to be answered and approaches that would facilitate merchant acceptance or cause concerns. This will be documented, and in the coming months we hope to have our first meeting where payment networks meet with ACT Canada merchants and acquirers.  It is an aggressive timeline, but we hope to get this much done before the fall MAG conference.

The June 15th meeting takes place at the end of Cardware in Niagara Falls, Canada.  It is open to all merchants, whether or not you attend the conference.  Merchants may also attend the closed door sessions with individual payment networks.  If you would like to attend the biometric authentication or payment network meetings, please email and tell me which one(s) you plan to join, so that we can ensure you a seat.  Of course, if you wish to Cardware, there are significant discounts for ACT Canada members, as well as for MAG members and you can find more information at

When it comes to biometrics there are many implications.  Help us make sure that everyone understands them.