Learn about how financial technology—or fintech—is changing the way we pay for things around the world.
After you’ve watched the video with your students, use this guide to explore key concepts, check for comprehension and lead a discussion.
- Fintech is an abbreviation for financial technology—the technology that enables consumers to pay for things.
- People around the world use many different financial technologies.
- Banking services are changing. Though many businesses still accept cash, they are adapting to use new technologies online and in-person.
- Peer-to-peer payment platforms allow people to pay one another without going through their bank.
- The Bank of Canada will soon be responsible for supervising retail payment systems, including peer-to-peer payment platforms, used in Canada.
- Digital currencies are not tied to the Canadian dollar or any other currency and are managed, stored and exchanged on computer systems.
Ask the following questions.
What are peer-to-peer payment platforms?
Peer-to-peer payment platforms are technologies that allow people to pay each other directly without going through a bank or using cash. These include platforms like PayPal, Google Pay and Apple Pay.
What are the risks of peer-to-peer payment?
Since these payment platforms don’t have the security of a bank to protect your money, cyber attacks can be a risk. That’s why in 2021 the Retail Payment Activities Act was passed. Once the Act comes into force, the Bank of Canada will be responsible for supervising payment service providers, such as peer-to-peer platforms, to ensure they manage risks and safeguard users’ money.
What is a digital currency?
Digital currencies are also transferred peer to peer, meaning money goes directly from one person to another and not through a bank. These unique currencies are managed, stored and exchanged on computer systems. They are often called cryptocurrencies, referring to the encryption used to create and verify transactions. They are not tied to the Canadian dollar or any other currency. Some of the many digital currencies being used today are Bitcoin, Ethereum and Dogecoin.
What are the risks of a digital currency?
Current digital currencies aren’t accepted everywhere. It’s hard to pay for your lunch with bitcoin. They also change value very quickly. The exchange rate between digital currencies and centralized currencies like the Canadian dollar is not stable. It’s hard to predict what a digital currency will be worth from day to day or year to year.
Ask the following questions.
- How many different ways have you paid for something in the last month?
- Why do you think fintech is changing the way we pay? What are the advantages of new financial technologies like peer-to-peer payment platforms?
- Is fintech accessible to everyone? What are some of the barriers to using fintech for payments?
- Does making it easier to spend money lead to more spending? What are some of the ways you can keep track of what you’re spending with fintech?
- What do you think fintech or money will be like in the future?