Retail System

The Retail System, known formally as the Automated Clearing Settlement System (ACSS) is where the vast majority of payments in Canada are cleared. That amounts to about 28 million transactions on an average business day. Although it handles 99% of the daily transaction volume, it only accounts for 13% of the value cleared by all our systems.

The Retail System tracks the volume and value of payment items exchanged between participants and determines the balances due. Rules and standards detail how the exchange, clearing and settlement of all cleared payments must occur.

Specific participant financial institutions, referred to as direct clearers, 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. During the morning of each business day, the Bank of Canada adjusts the financial positions of the individual direct clearers by transferring funds among their accounts to reflect the net balances of the previous day’s clearing.

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


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.