CGI sets Interac milestone
Dave, this is further to your inquiry as to what I significance I attached to the WTO pact last week. This is an article from September which gives us a clue as to just how big CGI's future could be in the financial services and processing sector - a sector particularly favoured by CGI's recent acquisitions and partnerships.
As indicated in the article, the usage of debit cards is growing exponentially, ATM usage keeps growing and foreign banks will prefer going through an independent service provider such as CGI rather than go to a competitor like TD, Royal, BNS etc. Just think of it, CGI makes money on each transaction!
BY JOHN PARTRIDGE
Financial Services Reporter (Globe & Mail)
Wednesday, September 17, 1997
Information technology provider CGI Group Inc. has created a new milestone for Interac, which operates Canada's automated teller machine and debit card networks.
The Montreal-based company has become the first non-financial-institution member of Interac to begin handling live debit and ATM transactions on the networks since the group was forced to broaden its membership as the result of a settlement with federal competition cops over alleged anti-competitive behaviour.
On Monday, after months of testing, CGI began processing transactions for the Canadian unit of Republic National Bank of New York. Although Republic National has no ATMs or debit terminals of its own, its customers will be able to use their bank cards to gain access to their accounts via other banks' machines.
CGI is negotiating similar deals with several other foreign-owned banks, including Bank of East Asia (Canada), based in Richmond Hill, Ont., and Sottomayor Bank Canada of Toronto, Leon Shapiro, the company's senior vice-president of electronic commerce, said. CGI also is in talks with some retailers and other potential non-bank clients, although he declined to name them.
CGI is one of five companies that have joined Interac as so-called "direct connectors" since a settlement between Interac and the Competition Bureau took effect last November. This means the newcomers are able to link their computer systems directly to the Interac network rather than having to do so indirectly through one of the Big Six domestic banks or other major financial institutions that created Interac.
The other four direct connectors are SNS Shared Network Services Inc. of Mississauga, Sun Life Trust Co. of Toronto, Global Payment Systems of Canada Ltd. and ING Bank of Canada of Toronto. SNS was the first non-financial institution to join -- last January but it has not yet activated its link. Interac president Joanne De Laurentiis said that she expects SNS and the other direct connectors "will all be live by the end of September.
Hooking up is complex. "There are dozens and dozens of connections and tests to me made to ensure that transactions work," she said. Seven other new members, most of them small credit unions, also have joined Interac since last November as "indirect connectors," mostly through Royal Bank of Canada and Bank of Montreal, she added.
Debit card use is growing exponentially in Canada, while ATM use also is continuing to expand, although more slowly.
CGI's Mr. Shapiro said the company figures it has a competitive advantage over Interac's financial institution members when it comes to pitching foreign-owned banks. Many of them, he said, prefer to go through an independent service provider rather than paying a big-bank competitor to handle this business.
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