As part of its initiative to modernise Canada’s core national clearing and settlement framework and infrastructure, the Canadian Payments Association has set out a modernisation vision based on research conducted in collaboration with the Bank of Canada.
‘Assessing the issues’
The CPA says the report outlines the most critical issues the industry must investigate to improve the payment system to best meet the needs of Canadians.
“There are many options for the future of payment systems and many opinions on what should take top priority. This research gives us a way of assessing the issues, and the tradeoffs, in a comprehensive and systematic way,” said Carol Ann Northcott, vice president, Risk, Security and Research and chief risk officer at CPA.
The research will be used to assess how a payment system should balance the Canadian public policy objectives of safety and soundness, efficiency and end-user interests given the attributes of the system.
The CPA characterises these attributes, which can be used to characterise any payment system, as access, functionality, interoperability, timeliness of payments and risk management.
Three areas of focus
The research points to three areas of focus as the industry considers modernizing Canada’s national clearing and settlement system:
1. A core payment system must provide rich functionality, allowing for value-added services that can evolve with changing technologies.
2. In order for new market entrants to maximize the efficiencies they offer Canadians, their access to the payment system must be considered. With access comes new risks and we must strike the right balance between efficiency and safety as we evolve to meet consumer needs. The research points to three areas of focus as the industry considers modernizing Canada’s national clearing and settlement system.
3. The true demand for timeliness in payments and how best to provide it must be better understood in the Canadian context.
“The global payments ecosystem is changing, enabled by new technology and driven by changing user demands. In Canada, we are taking a holistic approach to modernizing our systems, which includes significant research, a global perspective and industry consultation. This particular piece of research is a first step and will help frame industry discussions as we move forward,” said Gerry Gaetz, President and CEO of the CPA.
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