Large Value Transfer System

The Large Value Transfer System (LVTS) facilitates the transfer of irrevocable payments between Canadian financial institutions.

While actual settlement with the Bank of Canada occurs at the end of each day, funds are credited to the recipient’s account in near real-time. This makes LVTS payments immediately final and irrevocable. 

LVTS is the first model of its kind in the world, a hybrid that combines the benefits of the two main models for current payment systems. It achieves the real-time payment finality of a Real Time Gross Settlement (RTGS) system, with the added benefit of lower collateral costs associated with a netting system.

On average in 2015, LVTS was used to clear and settle about $171 billion in Canadian dollar payments each business day, or approximately 87 per cent of the total value moving through the Canadian payment system. Close to 22,000 LVTS payments were processed each day, with the average value of a transaction in the range of over $5.3 million. LVTS is also particularly suitable for time-sensitive payments of any value.

Direct LVTS participants must establish and maintain an LVTS settlement account at the Bank of Canada. Certain financial institutions participate directly in LVTS, while others arrange LVTS payments for their customers through direct LVTS participants.

The legal foundation for LVTS is provided in our LVTS By-law and in the Payment Clearing and Settlement Act. The Bank of Canada is responsible for monitoring the flow of payments through LVTS and the settlement positions of the participants at all times. Payments Canada administers the daily operations of LVTS as well as the LVTS Rules. LVTS operating costs are funded by our system participants.

Payment System Procedures