How Canada’s evolving payment landscape will impact lenders
This article was originally published on canadianlenders.org on April 1.
By: Rondev Bhattacharya, Director, Industry Relations
As Director, Industry Relations, Rondev leads efforts to provide best-in-class support and engagement for our members and stakeholders, fostering collaboration across the payment ecosystem. His team drives initiatives that enhance trust, efficiency and innovation while aligning stakeholder needs with strategic industry objectives.
As the needs and behaviours of Canadians shift, so does the way they pay and get paid. To meet these demands, Canada’s payment systems are evolving.
Payments Canada is working with the industry to modernize our national payment systems to ensure global competitiveness. Two key initiatives that will result in numerous benefits for lenders are the adoption of the ISO 20022 payment messaging standard and the enhancements being made to the bill payment framework.
A global standard for payment messaging
ISO 20022 is a standardized messaging format designed to improve global business payments. Serving as the foundation for payment messaging, it provides consistent, rich and structured data. Payments Canada manages the standard’s Canadian usage guidelines and is supporting its multi-year implementation.
The adoption of ISO 20022 is valuable to lenders as it can provide higher-quality data and insight across the payment chain. This means lenders can receive detailed and accurate information, reducing manual errors and improving the accuracy of loan processing and management.
Lenders, like many organizations, face a wide array of risks that can impact their operations, financial health and long-term sustainability. ISO 20022 can help improve risk management by offering more transparency into transaction details and helping lenders identify potential issues more quickly.
Additionally, ISO 20022 can help lenders deliver better customer experience. With standardized data, lenders can provide their customers with a more seamless end-to-end experience. This can allow their customers to make loan repayments quicker and get real-time updates on loan status, improving overall customer satisfaction.
Bill payment processing
Bill payments for cellphone services, water, gas, or property taxes are often initiated between accounts at different financial institutions. These financial institutions use Payments Canada’s Automated Clearing Settlement System (ACSS) to track and reconcile these payments. In 2023, 9.8 billion payments were processed through the ACSS, many of which were bill payments.
Payments Canada’s Rule H6 provides the regulatory framework for the processing of bill payment remittances through the ACSS by member financial institutions. Last year, Payments Canada conducted a public consultation on proposed changes to Rule H6. The proposed changes aim to improve operational efficiency, the ability to embrace technological advancements in an evolving marketplace and the bill payment experience for consumers, businesses and financial institutions, including lenders.
The adoption of the ISO 20022 standard and updates to the bill payment framework are just some of the changes being introduced to ensure safe, secure and modernized payment options are available to Canadians.
To learn more about how payments can streamline operations and foster business innovation, join me at The Payments Canada SUMMIT, Canada’s premier payment event, taking place in Toronto From May 6 to 8, 2025. To save $100, I invite you to use my promo code, SUMM25PCVIP.
