OTTAWA, November 17, 2015 – The Canadian Payments Association (CPA) has launched a multi-year initiative to modernize Canada’s core payments infrastructure which will ultimately use an internationally recognized payment messaging standard - ISO 20022. The CPA today released a discussion paper outlining new research into the quantifiable benefits for Canada of adopting ISO 20022.
“Modernization of the Canadian payment system, which includes the implementation of the ISO 20022 payment message standard, will require material investment by financial institutions and businesses,” said Carol Ann Northcott, Vice-President responsible for Research at CPA. “Therefore, it is critical we understand the prospective benefits for all users of the Canadian payment system.”
CPA research on adopting ISO 20022 indicates costs savings could be as high as $4.5 billion over five years simply from the elimination of cheques. In 2014, nearly one billion cheques were written in Canada. Many businesses still use cheques because of the information (e.g. invoices) that can accompany a payment. The ISO 20022 standard, once implemented, will allow significantly more information to travel with electronic payments, enabling greater automation and improved efficiency for businesses and financial institutions alike.
Other benefits of adopting ISO 20022 – an internationally recognized payment messaging standard that is being adopted by a growing number of market infrastructures around the globe – are harder to quantify. Since the standard creates the potential for one payment language, it can facilitate payments innovation, more efficient cross-border payments, improved fraud detection, better service line integration for businesses, and more streamlined operations. The list of possible benefits goes on.
“Establishing a shared vision for the Canadian payments ecosystem in the future and understanding the efforts required to realize this vision, requires the collaboration and participation of all payment system users. That’s why we are actively engaging our member financial institutions and stakeholders. We are committed to support this industry-wide discussion with sound research, including this latest discussion paper on the benefits of ISO 20022,” said Gerry Gaetz, President and CEO of the CPA.
Visit the CPA’s website to find the full paper, The economic benefit of adopting the ISO 20022 payment message standard in Canada, more information on CPA’s approach to ISO 20022 and its initiative to support the modernization of the Canadian payments system. Previously released research relating to modernization can be found here.
About the Canadian Payments Association:
The CPA underpins the Canadian financial system and economy by providing safe, efficient and effective clearing and settlement of payments, which totaled $44.9 trillion in 2014, or $178 billion every business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made via debit cards, pre-authorized debits, direct deposits, bill payments, wire payments or cheques. The CPA's Large Value Transfer System (LVTS) is designated by the Bank of Canada as a systemically important payment system.
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