Research released today by Payments Canada and the Bank of Canada exploring payment system modernization initiatives around the world reveals a global trend towards infrastructure enhancements that support faster payments.
In keeping with its role to underpin the Canadian financial system and economy by providing safe, efficient and effective clearing and settlement of payments, Payments Canada conducted the research to inform discussions and decision making on the future of payments in Canada.
The research, Clearing and Settlement Systems from Around the World: A Qualitative Analysis, identifies a series of commonalities between jurisdictions with modernized payment systems, but reveals there is no “one size fits all” approach to modernizing payments. Each country’s path to modernization is unique, shaped by local public policy priorities, user needs and legacy payment systems.
Across 27 jurisdictions, Payments Canada and Bank of Canada found that most modernization initiatives involved:
• Adding a new real-time retail system, not necessarily accompanied by real-time settlement
• Building new or enhancing batch retail payment systems
• Upgrading large-value payment systems to support interoperability of faster retail systems
• Leveraging centralized infrastructure to enhance overall functionality
• Widening access to core payment systems
• A holistic, multi-system approach to modernization
“Payments Canada’s approach to modernization is centred on sound research and significant industry consultation to chart a course that is right for Canada,” said Carol Ann Northcott, Chief Risk Officer at Payments Canada. “These findings help us better understand global payments systems and what will be required to retain Canada’s competitive position and facilitate international trade.”
This research builds on the 2015 paper Public Policy Objectives and the Next Generation of CPA Systems: An Analytical Framework and will be used with other research and consultation work, including the Vision for the Canadian Payments Ecosystem, to support analysis and planning for the future of Canada’s payments system. Payments Canada is modernizing its rules, standards and systems to support the evolving needs and expectations of its participant financial institutions, businesses, consumers and governments.
Clearing and Settlement Systems from Around the World: A Qualitative Analysis can be found on the Payments Canada’s website. An accompanying infographic outlining the findings is also available.