Payment Gateway Integrations in Canada

If you are planning payment processor or payment gateway integrations in Canada, you have to keep in mind that you will need to implement special logic. Implementation of this additional logic is required by Interac Association, the major Canadian inter-bank debit network. Particularly, the new functionality, required by Interac network, is related to the mechanisms used in Canada for processing of card-present and card-not-present debit card transactions.

Canadian Payment Service Providers

To handle card present transactions (both EMV and swipe), Canadian payment service providers and payment processors use an additional level of transaction validation. A special block of encrypted data has to be added to every transaction when it is sent from the payment terminal (EMV terminal or an ordinary swipe terminal) to the payment processor. It is called message authentication code, or MAC block. Similarly, MAC block is added to the response, generated by the processor’s system. MAC block is a kind of a “digital stamp”, ensuring the integrity of transaction data. It allows both the processor and the terminal to verify that the transaction data remains unaltered when being sent.

To handle card-not-present transactions, some Canadian payment processors use a mechanism, similar to 3D secure verification. Particularly, to verify cardholder’s identity, they use a special online service, to which the cardholder is redirected when he makes an online purchase.

So, if you are planning integrations in Canada, keep in mind that you will need to significantly adjust your tools for processing of card present and card-not-present transactions. More information on Interac Association and integrations with Canadian operators is available in the respective article on Paylosophy.