The Way I See It… by Michael C. Volker
B.C. has the makings of a “Payments” industry cluster
Something
as basic and fundamental as the way money is moved around could become a
significant economic contributor for B.C.’s nascent e-commerce industry.
The B.C. Premier’s
council has identified Wireless, New Media, BiotTech,
and Fuel Cells as technology areas of concentration and growth. An important opportunity is missing from this
list! It’s called "Payments"
and sits under the "Financial Services" technology tab. So, why Payments and why
now?
Technology clusters
often get established through the presence of a major player that serves as an
industry anchor as we’ve seen in the case of Wireless and Fuel Cells. And, as in the other sectors, there’s a
wealth of smaller, innovative companies pushing the envelope in technology,
applications, and business models.
Do these conditions
exist to support the development of a Payments cluster? Which financial institution
could possibly serve as the industry anchor in electronic payment processing?
The answer for this won’t be found among the big banks. For the correct answer
one need look no further than B.C. Central Credit Union (CUCBC). In addition to representing over 25 billion
dollars of assets, and acting as central banker and trade association for
B.C.’s 63 credit unions, the building at the foot of the Burrard Street
bridgeCUCBC houses an impressive data
processing capability and a strong, innovative electronics payments product
development group.
Over 57 million
electronic payments were processed by CUCBC in 2002 – payments for individuals,
businesses, and governments from across the country. Those 57 million electronic transactions
represent a healthy 8.5% increase over the previous year – but paper processing
still represents 54% of CUCBC’s overall payment
operations, so ample room for future growth remains.
The cluster lead of
CUCBC could be strengthened by B.C.’s banking software and payment service
providers, such as DataWest Solutions and Fincentric Corporation, who each deepen the Payments area
business development, consulting and engineering talent pools.
One of B.C.’s
best-kept secrets is the host of early-stage innovators, pushing the payments
envelope with different processing technology, applications, and business
models. These enterprising young companies bring new ideas and flexible
approaches to the industry, and round out the requirements for the emergence of
a viable industry cluster. B.C. software and payment service providers such as HyperWallet Systems, Beanstream
Internet Commerce, e-xact Transactions, DataWave, Citadel Commerce, Ernex
Marketing Technologies, and ParaData Systems among
others are developing new and easier ways to pay, be paid, or be rewarded for
paying.
B.C. even has some
very clever hardware innovators quietly toiling away on the next great thing,
including a little gem based in Abbotsford, namely Bifco
Corporation, which is out to make sure that the parking lots of the future have
the most advanced, secure, and user-friendly money collection devices in the
planet.
And what about
the market itself? B.C. companies, especially those who have
proven their industry mettle over the past tough couple of years, are well
poised to take advantage of the myriad of opportunities in the Payments space.
These include new applications to lower payment risks and costs for business,
solutions marrying the internet and card networks in whole new ways, new online
and wireless payment notification and authentication services for financial
institutions, applications for cross-border payments, and new and useful
payment devices for both payor and payee.
HyperWallet Systems Inc., founded in 2000, is exemplary of companies
staking their turf in this promising field. Lisa Shields, the firm’s co-founder
is passionate about making B.C. a leading Payment cluster. She’s already
showing impressive results by having signed up over 70 80
Canadian credit unions for its payment system. For two years already
individuals have been able to use HyperWallet to
“beam” cash – via email – to others. All that’s needed is
an email address and a bank account. Now, HyperWallet is launching a debit
card, to extend the reach of
its technology to the point of sale and ATM.
The way I see it, Payments could be the cluster that
everyone is talking about in three to five years from now. The momentum of
these companies, fueled by market needs for more effective e-commerce payment systems,
coupled with a strong anchor could make this a reality.
Michael Volker is a high technology entrepreneur and
director of