AUTUMN 2012
FMI
*
IGF JOURNAL
39
The CPA is a not-for-profit organiza-
tion established by Parliament to manage
the systems through which money flows
between financial institutions. CPA is
working with financial institutions and the
federal government to formulate a regu-
latory framework that would govern the
electronic handling of one-time “remote”
(i.e. not face-to-face) payments and pave
the way for the new services the govern-
ment is developing.
Issues under study include authentica-
tion of the payer, authorization to pay,
standards for the integrity of data, the
liability of parties to the transaction and a
formulation of Best Practice Requirements
for the preservation of security.
In reviewing Canadian progress in these
and other areas of electronic purchasing,
it is noted that the federal government’s
adoption of new e-payment processes for
its own transactions tends to expand their
more general use.
One reason is market stature. The fed-
eral government’s customer base is 30
million Canadians and its transactions ac-
count for 10% of the total flow and 15% of
electronic transactions between financial
institutions. When the financial industry
weighs the pros and cons of introducing a
new service, this can be enough clout to tip
the scales in favour of viability.
payments, including wire transfers.
The project began with a research study
to define security and other requirements
and also to determine whether a business
case existed for its development.
The study concluded that it did and
found that government and business or-
ganizations would welcome such a service
subject to some provisions: the mechanism
should be compatible with the require-
ments of all intended users, it should use
new and existing capabilities, and the price
must be right.
Consumer Payments
In another current project, PWGSC has
been looking to expand the range of online
options (presently limited to credit cards)
for making payments of less than $5,000.
Most of the payments the federal govern-
ment receives from products and services
fit into this category. As part of the project,
PWGSC is conducting a survey to gauge
public willingness to use other payment
mechanisms.
The Regulatory Environment
The development of new electronic pay-
ment options requires the parallel formu-
lation of regulations to govern their use
– which is where the Canadian Payment
Association (CPA) comes in.
The existing options were neither of
these things. To accept credit card pay-
ments on the Internet, a government
department had first to contact with a
third-party service provider to provide
the necessary interface with the credit
card company. Design of this custom-
ized system was costly – and the expenses
did not end with design. When contracts
expired and contractors changed, depart-
ments faced the expense and disloca-
tion of changing the interface to suit the
new provider.
With the RGBB up and running, PWG-
SC is now looking to capitalize on its po-
tential as a platform on which to build
new online payment services and to add
functionality to existing ones. In a current
project for example, PWGSC is working
to combine the Buy Button with the pro-
tection of The Secure Channel, an on-line
government-wide network for Internet-
based transactions with advanced privacy
and security features that became opera-
tional in 2002.
The Buy Button also figures promi-
nently in two other PWGSC e-payment
development projects:
Corporate Payments
One is the development of an on-line
mechanism other than credit cards that
government and business organizations
can use to receive payments of $5,000 and
up. The mechanism PWGSC has in mind
would allow companies and individuals to
make payments on-line from their deposit
accounts and also provide simultaneous,
on-line authorization to pay from a finan-
cial institution.
Driving this project is concern about the
prohibitively high costs of credit card use
(merchant discount rates in particular) for
large-value transactions. For government
departments, another problem is the lack of
adequate revenue-accounting information
accompanying other forms of electronic
About the Author
As Director General, Banking and Cash Management, Public Works and Government Services
Canada, Carol Armatage is responsible for directing the development and implementation of
approaches, processes and procedures for managing: all public money passing through the
Consolidated Revenue Fund; the government’s banking facilities and compensation to the
financial institutions; the development and delivery of payments products; the implementation of
direct deposit; payment standards; functional direction for payment operations in regional offices;
the operational delivery of payment services in the National Capital Area; and automated testing,
office automation, and Internet support services for GOS.
Since joining the public service, Ms. Armatage has held various positions in PWGSC, including
Director of Payment Projects and Director of Payment Products and Services. She holds an
honours B.A. in English from Queen’s university, an M.A. in Drama from the University of Toronto,
and a Diploma in Public Administration from Carleton University.
