Boston-based Forrester Research predicts that a new kind of file-sharing, P2P payment services, are going to take off with Canadian banks later this year.

Forrester says that four of Canada’s chartered banks (Bank of Montreal, CIBC, Scotiabank and TD Canada Trust) will launch P2P (person-to-person) payment services later this year. Think of it as Napster with money rather than music files. “Like Web banking and direct payment, this bank-sponsored initiative will rapidly gain traction with Canadian consumers,” predicts Forrester analyst Jordan Kendall.

The banks signed exclusive deals earlier this year with CertaPay, a Toronto-based provider of P2P payment solutions. Brad Badeau, former CEO of Trimark Financial, is one of the principals behind the firm. The four banks intend to launch this new service in the third quarter of 2001.

Forrester believes that “P2P payment is set to explode in Canada. Unlike independent U.S. services like PayPal that have only succeeded in online niches, CertaPay’s bank-backed offering will penetrate the broader Canadian market far more readily.”

Some reasons it sites

•Canadians are world leaders in the adoption of Net-based finance and electronic payment systems

•the big banks are buying in

•the system uses email to reach payees making its reach almost unlimited

•recipients of a payment email are exposed to the concept creating a viral marketing effect that will fuel demand for the service.

“As Canadians abandon cash and cheques in favour of P2P, we expect that: retailers will equip point-of-sale terminals with email access, and as P2P replaces cash payments, banks will see ATM transaction volumes and revenues drop off dramatically. “To cut costs, banks will sacrifice their own on-premise machines for off-premise ATMs from vendors like AutoBranch Technologies that will let Royal Bank and TD Canada Trust provide branded services to their respective clients over a single platform.”