In the 1980’s, Banks and Trust Companies began sharing arrangements in order to allow their cardholders to use the ABM’s deployed by another institution. Royal Bank of Canada and Bank of Montreal each connected with a different international shared ABM Network, the Plus and Cirrus Networks respectively. They then offered other Canadian institutions connection to their proprietary networks to form a shared domestic network called Interac. By late 1985 they had been joined by the four largest MasterCard issuing institutions. There are currently approximately 30 chartered and sponsored members of Interac.
Don Wetzel, Inventor of the ATM
At present, two banking services are available to consumers through Interac: Shared Cash Dispensing (SCD) and Interac Direct Payments (IDP). SCD was the first service offered by Interac when it became operational in 1986.
In 1989, the charter members announced their plans to introduce IDP as a shared Interac service. From a pilot in Ottawa in late 1990, nationwide introduction of the IDP service was finally completed in 1994. From a POS terminal provided to the retailer by an Interac member, a customer can use his or her debit card to pay for a purchase by causing funds to be transferred directly form their account to the retailer’s account.
When a consumer uses an ABM or POS terminal, the Interac member that owns the ABM or POS terminal “acquires” the transaction and transmits a request for authorization through the network to the member that issued the card being used. The issuer responds by authorizing or denying the request. Upon receipt of the authorization, the acquirer dispenses cash or effect the POS funds transfer.
In 1996, deregulation required that non-financial companies be allowed to compete and have access to the Interac Payments System. The first opportunity was for ATM’s and in 1997 the first private ATM’s were installed in Canada. In 2001, privately owned POS systems capable of accessing Interac services were installed.
Today Interac has a strong membership of over 90 organizations and continues to expand. It currently service links more than 46,000 ATMs and over 5,000,000 point-of-sale debit terminals across the country.