Payments Canada Concludes Consultation on Modernization Target State

Published: April 4, 2018

February 23, 2018 marked the close of Payments Canada’s public consultation on the Modernization Target State, an in-depth view of the target end state for payment system Modernization in Canada.

The public consultation validated support for some of the key elements outlined in the Modernization Target State, at the same time, raising some considerations including:

There is strong support to broaden access to Canada’s core payments systems, without compromising safety and soundness, to encourage competition and innovation.

  • Feedback was shared about allowing the highest level of access to each system by permitting financial institution members equitable access to the exchange, clearing and settlement functions, as a means to enable firms to grow without having to rely on the services of their direct competitors.
  • The support for a risk-based approach to broadening access, with the want that risk tests adopted equally apply to all participants as the most effective way of preserving the overall safety, soundness and security of the payments infrastructure.

The agreement that Real-Time Rail has the potential to serve as a platform for innovation, with an understanding that access needs to be balanced with prudent risk management.

  • The desire for conditions that consider fairness and transparency for non-financial institutions to support leveling the playing field to encourage inclusion and competition between new entrants, incumbents and potential new entrants.
  • For the Real-Time Rail, perspectives shared about the aspects of various settlement models considered for the new real-time payments system.

The encouragement for Payments Canada to adopt a global approach for Modernization and to examine other options beyond those that have been historically used in Canada.

This valuable feedback will be incorporated into Payment’s Canada’s Modernization journey, which is now moving from planning to the implementation stage. Most recently, Payments Canada delivered the first major milestone of the initiative. Effective March 12, a new credit risk model was implemented for Canada’s retail payments system. This milestone was delivered as a result of ongoing collaboration and input from our member financial institutions and the wider ecosystem. Collaboration is a central tenet of the Modernization initiative, and will be a key driver for the delivery of our next major milestones in the fall of 2018 - a third daily exchange will be added and two-hour funds availability will come into effect.

Next on the Modernization journey

Modernization is built on an ambitious plan that will be refined and updated as milestone are reached. As we move on the journey, we are committed to publishing a Delivery Roadmap that will serve as an update on our progress. We also encourage anyone who is interested in learning more to subscribe to our quarterly stakeholder newsletter, The Exchange

For more information about Payments Canada’s Modernization initiative, check out the Vision for the Canadian Payment Ecosystem Companion Reader (April 2016), the Industry Roadmap & High-Level Plan Companion Reader (December 2016) and the Modernization Target State and the Modernization Target State Companion Reader (December 2017). If you have any questions or comments, please reach out to