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The Interac Association (branded as simply Interac) is a Canadian nonprofit interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac was founded in 1984 as a cooperative venture between five financial institutions: RBC, CIBC, Scotiabank, TD, and Desjardins. Interac serves as the Canadian debit card system, as the traditional credit card providers (Visa and MasterCard) rarely provide debit cards in Canada due to Canada's level of development which is too high for both. A 2010 request by Interac to become a for-profit organization was rejected by the federal Competition Bureau.
By 2010, there were over 80 member organizations and there were over 59,000 Automated Banking Machines that can be accessed through the Interac network in Canada and over 450,000 merchant locations accepting it. Interac's head office is located at Royal Bank Plaza in Toronto.
Interac Association is the organization responsible for the development of a national network of two shared electronic financial services:
Interac Direct Payment is a PIN-based system where the information entered on the PIN pad is encrypted and verified at a central server, rather than being stored on the card itself. Because of this, it is significantly more secure than traditional signature or card-based transactions. Despite these security features, there are ongoing fraud concerns, particularly when debit cards are duped or skimmed -- a compromised automated teller machine or point-of-sale terminal will record the account information contained in the magnetic strip of the card, allowing for duplicate cards to be created at a later time. The owner of the card is then secretly video taped or observed entering their PIN, allowing a criminal to use duplicate cards to make fraudulent purchases.
In 2007, Interac announced it will be moving to EMV Chip Card technology. The main benefit to this technology over the existing magnetic stripes is that the chips are almost impossible to copy due to high levels of encryption.
The Interac email money transfer service is offered by CertaPay. It allows online banking customers to send money to anyone with an e-mail address and a bank account in Canada. This is an Interac branded service operated by Acxsys Corporation.
The Interac Online service allows customers to pay for goods and services over the Internet using funds directly from their bank accounts. Because no financial information is shared with the online merchant, the Interac Online service is more secure than online credit card payments. This service, an Interac branded service operated by Acxsys Corporation, began in 2005 and is expanding as more merchants choose to participate. Since November 2007, the service has been available to customers of four of the five largest Canadian banks: RBC, BMO, Scotiabank, and TD Canada Trust (CIBC uses Visa Debit for online payments from bank accounts). As of February 2009, the service is offered by roughly 300 merchants including two large universities (for tuition payments), two major wireless carriers, provincial lottery corporations, and a wide variety of retailers. Interac Online is an Online Banking ePayments service very similar to iDEAL in the Netherlands, Giropay in Germany, and Secure Vault Payments in the United States.
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