The Canadian Payments Association, now called Payments Canada, has issued a document that outlines their national approach to payments modernization. Finextra provided a summary of the initiative’s goals:
Payments Canada issued an in-depth view of the target end state for payment system modernization in Canada, including the infrastructure, rules and standards that will benefit Canadians and businesses from coast-to-coast.
The Modernization Target State is the third publication in a series documenting Canada’s payments Modernization journey. The Vision for the Canadian Payments Ecosystem identified the needs in the Canadian marketplace – such as faster, safer and data rich payments – and the Roadmap & High-Level Plan outlined what the industry needed to do to begin to deliver on those needs.
The Canadian market, at least at this stage of development, is segmenting its payments capabilities into three platforms, two of which intend to support real time payments:
Lynx – Lynx will replace the current Large Value Transfer System, a high value payment system that facilitates secure real-time payments with transaction finality and supports settlement of other payment networks and financial market infrastructures.
Retail clearing with enhanced batch payments (or SOE) – A new system will replace the existing Automated Clearing Settlement System and U.S. Bulk Exchange. The new system will clear retail batch payments and comply with the Bank of Canada’s risk management standards for Prominent Payment Systems.
Real-time Rail – This new, always-on payments infrastructure will support immediate payments. The real-time infrastructure will enable fast, convenient payments and funds transfers and will be a platform for future innovation, where participants in the payment system can connect and develop new and exciting ways for Canadians to pay for goods and services and transfer money.
Given the level of trade that takes place between Canada and the U.S., the interoperability of the platforms with what is being built in the U.S. will be important to understand. A link to more details regarding Canada’s initiative can be found here.
Overview by Sarah Grotta, Director, Debit and Alternitive Products Advisory Service at Mercator Advisory Group
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