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Interac built its tokenization service on IBM Cloud to bring Apple Pay to Canada


Few technologies today are built by one company alone and it would seem to be the case for mobile payments in Canada.

In order to bring the technology to Canada, Interac had to create a tokenization system, and so, it built its Token Service Provider (TSP) on IBM cloud, as detailed in a blog post by Avinash Chidambaram, vice president of product and platform development at Interac Association.

Tokenization works by replacing a customer’s financial credentials with code that’s specific to a single device or account, which must be decrypted on the other end in order for a financial transaction to take place. This has been the cornerstone of Apple Pay’s security, and a possible sticking point with Canadian banks, which rely on Interac’s chip and pin technology to secure debit payments. At the time the two technologies were incompatible.

Last month Apple announced that after lengthy negotiations, support was finally coming from major Canadian banks, including Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBC), the Bank of Montreal (BMO), Toronto-Dominion Bank (TD), and the Bank of Nova Scotia (Scotiabank), Canadian Tire Financial and ATB Financial.

On the IBM Cloud, Interac TSP will be able to handle a greater volume of financial data and not be limited by storage, the organization said.

The combined solution, according to Chidambaram, helped enable Interac on Apple Pay, which allows customers with Interac debit cards issued by Canada’s five largest banks to add their cards to Apple Pay on eligible devices.

“With the Interac TSP proving successful, we’ve opened the door of possibilities for future applications,” Chidambaram wrote, hinting at other forms of mobile payment such as Samsung Pay and Android Pay, which are expected to see adoption in Canada within the next five years.