Retail System

The retail system, also known as the Automated Clearing Settlement Systems (ACSS) is the system through which the vast majority of Payments Canada payment items (both paper-based and electronic) are cleared through various payment streams. Members connect to this system securely via the CSN (Canadian Payments Association Services Network), which is owned and managed by Payments Canada.

ACSS supports 99 per cent of the daily transaction volume and 13 per cent of the daily transaction value cleared by all our systems.

The volumes and values of payment items that are exchanged between participants are entered into the ACSS System, and the system calculates the net balances across all participants. Rules and standards detail how the exchange, clearing and settlement of retail payments must occur.

Specific participant financial institutions, referred to as direct clearers, participate directly in the ACSS. These participants handle the clearing and settlement of payments for their own customers, as well as for customers that maintain accounts at the other financial institutions, known as indirect clearers. Direct clearers must maintain settlement accounts at the Bank of Canada. Settlement of the previous day’s net balances occurs during the morning of each business day, where settlement account balances are extinguished via payments to and from the Bank of Canada.

System technology upgrades in progress

To ensure the system remains safe, sound, resilient and efficient, work is underway to refresh the technology that underpins the system’s application. This refreshed application also applies to the US Bulk Exchange (USBE), which runs parallel to the ACSS. Working with our IBM Canada business partner we are developing the application while IBM Canada is building the technology infrastructure to support and host it.

Clearing & settlement across The Retail System

The Retail System clears paper-based and electronic payments.

Paper-Based Electronic
  • Cheques
  • Paper remittances
  • Government items
    (including government cheques, redeemed bonds,
    treasury bills, and coupons)
  • Direct deposits
  • Electronic data interchange
  • Electronic remittances
  • Imaged paper items
  •  Point of service debits and credits
  • Online debits and credits
  • Pre-authorized debits
  • Shared ABM Networks

BylawsRules StandardsAnnual Statistics

Cheque clearing

When a cheque is deposited at a financial institution’s branch, it goes to its regional data centre, usually that same evening. It will then be cleared and sent to the data centre for the institution of the cheque issuer.

At the end of each day, each direct clearer enters its total number and value of cheques that it must deliver to each other direct clearer into the Retail System. To optimize the flow of cheques, several cheque exchanges are scheduled each evening at six regional exchange points: Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver.

For cheques deposited digitally, and image is captured using a remote deposit capture service such as mobile phone application provided by a financial institution. 

Typically, cheques are cleared the same day they are deposited. However, cheques that are deposited late in the business day, or that can’t be processed by automated equipment, it will often be processed the next day. Cheques deposited on a Saturday will not be cleared until the following Monday evening.

In most cases, the "pay/no pay" decision must be made by the next business day. If the cheque is not honoured, it is returned to the branch that initially accepted the deposit.

Electronic payments clearing

All processes for the exchange and clearing of electronic payments occurs electronically without the exchange of physical payments.

Direct clearers sort and categorize electronic payments by stream and by the destination Clearer. Each direct clearer enters the total volume and value of transactions for which it is owed funds into the Retail System. These figures are combined with the totals for cheques and other paper-based payment items to determine the net balances due to and from each direct clearer to effect settlement on the books of the Bank of Canada the following morning.

Electronic payment streams include:

  • Automated Funds Transfer (AFT) debits
  • Primarily pre-authorized debits
  • AFT credits (mainly direct deposits)
  • Electronic Funds Transfer/Point-of-Sale transactions
  • Bill payments

For more detail about the procedures and schedules that apply to the various steams of electronic payments, refer to the Retail System rules.