Stephen Clark, a veteran financial services adviser who is now a partner in financial services practice at law firm Fasken Martineau DuMoulin LLP in Toronto, says it’s not too early to be asking questions about consumer protection and systemic risk.
“There are those that would argue that these players are small and cannot have a negative effect,” Clark said. “But as more and more of these players enter the market, the question has to be asked about whether there is a risk.”
He said all fintechs have the capacity to take market share from existing players, but upstarts in the payments segment have the potential to have a greater impact on the established system.
“The policy concern in the payments space is the fact that Canadians need to know they can rely upon their payments providers in the system,” he said. “What happens if that payment fails? The merchant is left scrambling.”