Canada delivers first milestone on payments modernization program

New credit risk model enhances safety and soundness of retail payments system

OTTAWA, March 12, 2018 - Payments Canada, the country’s financial market infrastructure for payments, is implementing a new credit risk model for the country’s retail payment system, effective March 12, 2018. This enhancement - the first major deliverable on the organization’s multi-year payments modernization journey - improves the safety and soundness of the existing systems.

“The retail payment system processes about 28 million transactions each business day. It is our job to ensure those values transfer safely, efficiently and effectively,“ said Gerry Gaetz, President & CEO of Payments Canada. “With the continued support and investment of Canadian financial institutions, this is one of many improvements on our modernization journey that will enhance the safety and soundness of the country’s payment systems and facilitate future innovation.”

With these changes, the retail system, called the Automated Clearing Settlement System (ACSS), will be aligned with international best practices and risk management standards. The Interim Credit Risk Model will see system participants pledging collateral to cover the risk they bring to the system.

The ACSS is where the vast majority of payments in Canada are cleared, including both paper-based and electronic payments. The system is used by specific participant financial institutions, referred to as direct clearers, who handle the clearing and settlement of payments for their own customers, as well as for customers that maintain accounts at other financial institutions, known as indirect clearers.

“Delivering the new ACSS Credit Risk Model is a result of ongoing collaboration and input from our member financial institutions,” said Jan Pilbauer, Executive Director of Modernization & CIO at Payments Canada. “Working closely with our members and the wider payments ecosystem is an integral part of our modernization efforts to ensure that we are meeting the needs of Canadians.”

For more information on Payments Canada’s Modernization program, please visit The Modernization Target State report and Companion Reader are also available.

View the forthcoming rules here.

About Payments Canada

Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared by Payments Canada’s systems in 2017 was approximately $50 trillion or $200 billion every business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and The 30% Club.

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