Financial technology (fintech) makes it easier for businesses to do everything from issuing invoices and processing payments to managing expenses and making payroll. These solutions are the behind-the-scenes tools that quite literally allow businesses to send and receive money.
But figuring out the right tech stack for your business is difficult, especially with how many options are on the market. It can be daunting to even know what tools are actually useful, and how your tech stack will fit together to meet your business needs.
We want to make it easy for your financial operations (finops) team to navigate the tech landscape, so we collaborated with Tal Schwartz, fintech advisor and author of the Canadian Fintech Newsletter, to provide a map of the best fintech on the market with detailed descriptions of how each one can help your business succeed.
The methodology
Every company in this finops guide:
- Is Canadian founded or headquartered
- Serves Canadian clients
While many of these fintechs could easily go in multiple categories, each company only appears once for simplicity.
The map is broken into two categories: accepting payments (accounts payable / AP) and making payments (accounts receivable / AR) to follow the most intuitive journey of cash through your business, from how you get it to how you use it.
Understanding each category
Accepting payments
Receiving funds is more than just processing payments. Businesses need tools that manage the entire lifecycle of a transaction. That’s everything from invoicing and offering various payment methods to reconciling into an accounting or ERP system and using that data to prepare reports.
Billing
Think of this as the first step in getting paid. It includes preparing quotes, sending out invoices and recurring bills, tracking those receivables, and managing collection.
It's a complex and fraught process. The average Canadian small business waits 27.5 days for invoices to be paid.
Comprehensive solutions like Plooto improve this by managing the entire workflow of accepting payments, including setting up roles and permissions for the entire finance team. Specialists like Notch, Tab Commerce, and SumoQuote provide these services for niche industries like hospitality or construction.
In-person payments
Merchants with physical locations need to be able to process card payments at the point of sale (POS), either through terminals or payment enabled phones.
In the 2000s, Moneris, a joint venture between RBC and BMO dominated the payment terminal market. More recently, modern processors like Lightspeed and Helcim have expanded their digital and in-person terminal footprint, and brought down associated fees.
Online payments
But not all businesses have a storefront. Businesses can increase conversion at online checkout / invoice by offering multiple payment rails. Historically that’s been EFTs and digital cards. Payment gateways like Zum and VoPay, have taken this even further by facilitating Interac e-Transfers (Canada’s debit network) and through bank-to-bank connections (open banking payments) at checkout.
Financing
Funding payments, whether consumer-facing or to suppliers, is an important lever for finance teams to pull. E-com BNPL like Paybright, acquired by Affirm in 2020, allows shoppers to break purchases into smaller payments. Similar products from Tabit and Quickly are used to turn vendor payments into installments, either at point of sale or after the fact through invoice factoring.
Reporting, modeling and planning
The final step in accepting payments is the data itself. Transactions need to flow directly into accounting systems and ERPs to generate reports and analyze the health of your business. Data analytics platforms like Maxa consolidates and analyzes raw business data while tools like Quota use this data for industry benchmarking.
Making payments
All of the nuance involved in receiving payments is mirrored in making them. Finance teams need to pay suppliers and employees in different currencies, create spending controls for physical and online expenses, and file and pay taxes seamlessly. All-in-one platforms like Plooto can make these processes simpler by adding automation to payment workflows.
Expense management
This is the operating system of any finance team. Bill pay requests and approvals need to be monitored and managed to prevent leakage and double payment. Canadian fintech Float has become dominant in the Canadian market, duplicating the success of similar US-based competitors Brex and Ramp.
FX
One of the largest cost centers for businesses is FX. Paying vendors in USD and selling to clients in CAD can lead to 5-7% losses on currency conversion through your bank. The solution is cash management tools that facilitate FX like Corpay for enterprise and Finofo for SMBs.
Payroll
A business’s largest payments are often to their own staff and require a huge level of compliance and technical oversight. Paying employees and contractors means calculating and withholding contributions to benefits and pension. Solutions like Wave and Humi have built integrations directly into the CRA to make this process completely automated.
Digital banking
Digital banking is one of the hottest areas of Canadian fintech innovation. Fintechs like Loop and Vault provide online first everyday bank accounts to hold deposits, manage treasury, and pay suppliers.
These fintechs are able to exist by partnering with regulated financial institutions like Peoples Group and DC Bank, which allows them to hold client deposits. They differ from traditional banks by providing a completely online experience at a lower price point.
Notably missing here are NorthOne and Relay, both very successful Canadian-founded fintechs that only service US businesses.
Tax filing
The smaller end of small businesses typically have less complex tax returns creating opportunities for automation from online filing services. These use the AI to replace or supplement the work an accountant would do — compiling financial records and submitting them to the CRA.
Tax payments
Every business’s favorite part of tax season… is paying them. But despite how straightforward the transaction appears, mistakes are often made. Overpaying, late payments, or payments from the wrong account are commonplace errors. Fintechs like TaxPay automate the process of tax payment either directly or through an accounting firm.
Bill pay by card
Not all Canadian businesses accept online payments (see "online payments" above). This means that paying by credit card and collecting the associate rewards is not always an option. Fintechs like RBC owned PayEdge allow businesses to pay bills by credit card, even when a supplier either doesn’t accept card payments or that amount or full stop.
Where to invest for greater efficiency
Now that you know some of the best options out there, you can put together the ideal finops tech stack for your business. This ultimately helps you establish more efficient processes and reduces manual workload.
For more information on how to use technology to make your financial workflows more efficient — and spend less bandwidth on manual work — check out our guide to leveraging AI and automation to improve your workflows.
