Interac and PayFacto Launch Konek to Drive Account-Based Payments in Canada

PayFacto is integrating Interac’s Konek digital wallet across its Canadian merchant network, enabling businesses to accept account-based payments alongside traditional cards. For fintech professionals, this move signals a significant push toward diversifying payment rails in Canada, offering merchants lower acceptance costs and a shift in fraud liability through the Interac Direct rails.

What was announced

Montreal-based PayFacto is bringing Konek to its integrated commerce platform, which unites payments, point-of-sale (POS), and digital commerce for its merchants and channel partners. Konek functions as a digital wallet that allows customers to pay participating online merchants directly from a chequing or savings account. This functionality is powered by Interac and supported by Canada’s leading financial institutions through the Interac Direct system.

The integration is specifically designed to address merchant pain points regarding the high cost of traditional card acceptance. By utilizing account-based payments, businesses can potentially lower transaction fees compared to most traditional cards. Furthermore, Konek introduces features aimed at mitigating the operational strain caused by fraud and chargeback disputes. A critical component of this is the issuer fraud liability shift, which transfers the responsibility for eligible fraud losses from the merchant to the financial institution that issued the account.

PayFacto is making Konek available across its merchant and partner networks, providing a homegrown payment option built on existing domestic financial infrastructure. The rollout focuses on giving businesses the option to enable account-based payments alongside card-based payments, meeting consumer demand for more payment choices while helping merchants manage the costs of getting paid. This combination is intended to drive momentum for account-based payments within the Canadian hospitality and technology sectors where PayFacto is most active.

"Canadians are asking for more choice in how they pay, and merchants want that choice to work harder for their business,"

Kris Zanuldin, Head of Konek at Interac

The companies involved

Interac Corp. is a central pillar of the Canadian financial ecosystem, providing the infrastructure for debit payments and fund transfers across the country. The organization facilitates millions of daily transactions via its Interac Debit and Interac e-Transfer services. It has recently expanded its focus toward digital identity and specialized wallet solutions like Konek to maintain its relevance in an increasingly digital-first economy, operating through its primary digital hub at interac.ca.

PayFacto Payments Inc. is a Montreal-based leader in the payment and hospitality technology sectors. The company specializes in providing integrated commerce solutions that combine payment processing with proprietary point-of-sale software. PayFacto has established a significant presence in the Canadian market by catering to the specific needs of hospitality businesses, offering them tools to manage both front-of-house operations and back-end financial processing. By integrating domestic payment rails like those provided by Interac, PayFacto positions itself as a versatile alternative to global payment processors, focusing on the efficiency and reliability of the Canadian banking network.

What FF News has reported before

FF News has closely followed Interac’s efforts to modernize Canadian payments and expand its digital footprint. We previously covered how DCPayments Integrates Interac e-Transfer into Online Checkout for Canadian Merchants, a move similar to this Konek integration aimed at expanding account-based options. Our reporting has also highlighted shifting consumer habits in the region; an Interac Survey Shows Gen Z Is Driving a Surge in Mobile Spending, underscoring the demand for digital wallet solutions. Additionally, we have tracked the broader digital banking landscape in Canada, including when Haventree Bank Challenges Traditional Banking with New Direct-to-Consumer Digital Platform. More recently, we looked at security innovations in the space with Incode Launches TrustGraph Fraud-Signal Sharing Network, which reflects the industry-wide focus on the fraud prevention measures mentioned in the Konek announcement.

What this means

This announcement highlights the intensifying competition between domestic payment rails and global card networks in the Canadian market. By offering an account-to-account (A2A) alternative that includes a liability shift, Interac is directly attacking the value proposition of traditional credit cards, which often burden merchants with high fees and chargeback risks. For the wider industry, this move puts pressure on traditional acquirers to justify their margins as merchants gain access to cheaper, bank-backed alternatives. The success of Konek will likely depend on whether the friction of a digital wallet can be outweighed by the financial incentives for the merchant and the security promises for the consumer.