Canadian payments processor Moneris, co-owned by banks RBC and BMO, announced its sale to a US private equity firm this week. If the $2-billion CAD deal is closed and approved, roughly one in three Canadian payments will run through a US-controlled entity.
Payment processing is an invisible but critical piece of economic infrastructure. With Moneris gone, Canada’s Big Five banks will soon mainly rely on US providers. As Vass Bednar of the Canadian Shield Institute pointed out, that means a foreign player will have “effective control over how the country’s commerce clears.”
Domestic tech solutions could help. Calgary’s Helcim is positioning itself to fill the vacuum left by Moneris. Its CEO, Nicolas Beique, told BetaKit that Helcim has seen a 30-percent jump in inbound calls this week from Canadian leads who want to support Canadian companies. Meanwhile, some have questioned whether Moneris itself is a valuable enough asset to worry about; a single payment processor isn’t necessarily as critical to sovereignty as the rails those payments run on.
But real-time rails aren’t here yet, and Moneris’s new ownership still creates a vulnerability. The long-awaited instant payment settlement is still on the way. It’s supposed to finally roll out in Q4 of this year, bringing faster and cheaper payments.
If nothing else, the Moneris sale could be a wake-up call for Canada to create the thriving payment ecosystem it has promised companies and consumers. A first step would be finally delivering sovereign payment rails and ensuring they can’t be bought.
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