Silicon Valley North #56                                       July, 2003


The Way I See It… by Michael C. Volker


B.C. has the makings of a “Payments” industry cluster


Something as basic and fundamental as the way money is moved around could become a significant economic contributor for B.C.’s nascent e-commerce industry.


The B.C. Premier’s council has identified Wireless, New Media, BiotTech, and Fuel Cells as technology areas of concentration and growth.  An important opportunity is missing from this list!  It’s called "Payments" and sits under the "Financial Services" technology tab.  So, why Payments and why now?


Technology clusters often get established through the presence of a major player that serves as an industry anchor as we’ve seen in the case of Wireless and Fuel Cells.  And, as in the other sectors, there’s a wealth of smaller, innovative companies pushing the envelope in technology, applications, and business models.


Do these conditions exist to support the development of a Payments cluster? Which financial institution could possibly serve as the industry anchor in electronic payment processing? The answer for this won’t be found among the big banks. For the correct answer one need look no further than B.C. Central Credit Union (CUCBC).  In addition to representing over 25 billion dollars of assets, and acting as central banker and trade association for B.C.’s 63 credit unions, the building at the foot of the Burrard Street bridgeCUCBC houses an impressive data processing capability and a strong, innovative electronics payments product development group. 


Over 57 million electronic payments were processed by CUCBC in 2002 – payments for individuals, businesses, and governments from across the country.  Those 57 million electronic transactions represent a healthy 8.5% increase over the previous year – but paper processing still represents 54% of CUCBC’s overall payment operations, so ample room for future growth remains.


The cluster lead of CUCBC could be strengthened by B.C.’s banking software and payment service providers, such as DataWest Solutions and Fincentric Corporation, who each deepen the Payments area business development, consulting and engineering talent pools. 


One of B.C.’s best-kept secrets is the host of early-stage innovators, pushing the payments envelope with different processing technology, applications, and business models.  These enterprising young companies bring new ideas and flexible approaches to the industry, and round out the requirements for the emergence of a viable industry cluster. B.C. software and payment service providers such as HyperWallet Systems, Beanstream Internet Commerce, e-xact Transactions, DataWave, Citadel Commerce, Ernex Marketing Technologies, and ParaData Systems among others are developing new and easier ways to pay, be paid, or be rewarded for paying.  


B.C. even has some very clever hardware innovators quietly toiling away on the next great thing, including a little gem based in Abbotsford, namely Bifco Corporation, which is out to make sure that the parking lots of the future have the most advanced, secure, and user-friendly money collection devices in the planet. 


And what about the market itself?  B.C. companies, especially those who have proven their industry mettle over the past tough couple of years, are well poised to take advantage of the myriad of opportunities in the Payments space. These include new applications to lower payment risks and costs for business, solutions marrying the internet and card networks in whole new ways, new online and wireless payment notification and authentication services for financial institutions, applications for cross-border payments, and new and useful payment devices for both payor and payee.


HyperWallet Systems Inc., founded in 2000, is exemplary of companies staking their turf in this promising field. Lisa Shields, the firm’s co-founder is passionate about making B.C. a leading Payment cluster. She’s already showing impressive results by having signed up over 70 80 Canadian credit unions for its payment system. For two years already individuals have been able to use HyperWallet to “beam” cash – via email – to others. All that’s needed is an email address and a bank account. Now, HyperWallet is launching a debit card, to extend the reach of its technology to the point of sale and ATM.


The way I see it, Payments could be the cluster that everyone is talking about in three to five years from now. The momentum of these companies, fueled by market needs for more effective e-commerce payment systems, coupled with a strong anchor could make this a reality.


Michael Volker is a high technology entrepreneur and director of Simon Fraser University’s Industry Liaison Office. He oversees Vancouver’s Angel Technology Network and is past-Chair of the BC Advanced Systems Institute and the Vancouver Enterprise Forum. He may be reached at