The right of or opportunity for an institution to use the services of a particular payment system to exchange, clear and/or settle payments on its own account or for customers
The minimum conditions that an entity would need to satisfy in order to participate directly (or indirectly) in a payment system. Access criteria may differ depending on what role the entity will perform as a participant in the system (e.g. exchange of payment messages, clearing or settlement with the central bank)
Automated Clearing House; centralized architecture that is used to exchange, and reconcile batches of payment items. The process of submitted files vary greatly from region to region. Some systems only hold and forward batches upon settlement (i.e., settlement before exchange), while others will pull-out individual items for validation, sorting or routing
Automated Clearing Settlement System; a batch total entry system used to enter batch totals for transactions exchanged by CPA member direct clearers. The ACSS calculates multilateral net positions to determine the balances due to and from participants; includes rules and standards that prescribe how payments should be made between direct clearers
Anti-Money Laundering/Anti-Terrorism Financing; legal requirements by which financial institutions globally, and many non-financial institutions, are required to identify and report transactions of a suspicious nature to the financial intelligence unit in the respective country
The process by which the identity of a User who wishes to access a system or service is confirmed. Authentication protocols may take many forms depending on whether validation is being done in person or electronically
An Automated Clearing Settlement System (ACSS) holiday is when the system is not operational. (Saturday, Sunday and the following national holidays: New Year's Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Remembrance Day, Christmas and Boxing Day).
Direct deposits to an account held at a financial institution. Commonly used for payroll. Also known as AFT credit.
Pre-authorized or bill payment error correction debits to an account held at a financial institution. Most commonly used for mortgage and other bill payments, as well as funds transfer and corporate cash management payments. Often recurring, but can also be sporadic. Does not include debits to credit cards.
The point at which a payee can withdraw and use funds (which may occur before the participating FIs settle)
A payment item drawn by a bank against its own account
Canada's central bank; it is not a commercial bank and does not offer banking services to the public. Responsible for Canada's monetary policy, bank notes, financial system and funds management.
Payment systems characterized by bilateral exchanges made outside of a central system, and the separate entry of batch totals into the clearing system to support settlement
The net amount that represents the difference owed between pairs of participants.
An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to bearer. [see s. 16 - Bills of Exchange Act]
A five digit number (including leading zeros) assigned by a financial institution to identify a branch. Branch numbers can be found in the Financial Institutions File and in the Financial Institutions Branch Directory.
From a CPA rules perspective, this means any day other than an Automated Clearing Settlement System holiday.
A pre-authorized debit drawn on the account of a payor for the payment of goods or services related to a business or commercial activity of the payor. For example, payments between franchisees and franchisers, distributors and suppliers, and dealers and manufacturers.
Compound Annual Growth Rate calculates the annual average growth over multiple years, while taking into account the effects of average compounding growth experienced in each year.
A secure electronic payment system used to accept, transmit, process, authenticate and authorize transactions made by payment card (credit or debit) and to transfer information and funds among participants and payment card users
A PAD drawn on the account of a payor to transfer, consolidate or reposition funds between their account at one member financial institution to an account at another member financial institution, for the same Business or closely-affiliated businesses (e.g. transfers between a parent company and its subsidiary).
Payments are exchanged, cleared and settled through a single central system, where they are routed and validated by a central institution
Knowing that settlement will take place.
An item on the face of which the drawee financial institution has written or stamped the words "accepted" or "certified" or any other word or words to that effect.
A Bill of Exchange drawn on a bank, payable on demand. [s. 165 - Bills of Exchange Act]
Commonly understood to mean the process of transmitting, reconciling and, in some cases, confirming payment orders prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement. For the purposes of ACSS, it means the reconciliation of payment items that were exchanged and the calculation of net totals for settlement
The mechanisms and procedures that allows financial institutions to calculate how much is owed to each other as a result of their customers' transactions and to effect the discharge of those obligations.
The total of the net amounts owing to or by a member as a result of clearing.
Also known as the negotiating financial institution.
The financial institution that, on behalf of its customer, presents an item for payment to the drawee. It is the financial institution that receives an item on deposit.
A core payment system is defined as one that (i) includes at least clearing and settlement, where settlement occurs in central bank funds, and (ii) is central to the efficiency and stability of the financial system and economy.
The fundamental technology, rules and processes needed by any payment system
A paper item that appears to be original or genuine, but has been fraudulently made.
Payment systems characterized by bilateral exchanges made outside of a central system, and the separate entry of batch totals into a separate clearing system.
Payments are exchanged, cleared and settled through multiple point-to-point systems, where they are routed and validated by the participants
A CPA member (other than the Bank of Canada) that, on its own behalf, exchanges payment items and makes entries directly into the ACSS.
An entity(e.g. financial institution) that meets the applicable access criteria to access a payment system directly (without sponsorship or agency agreement with other bank/payment services provider)
Deferred Net Settlement system. A system that effects the settlement of obligations or transfers between or among counterparties on a net basis at some later time.
The financial institution to which a debit payment item is addressed and which is directed to pay the specified amount of money.
Refers to how effectively the processes are carried out to meet end-users’ needs, and an efficient allocation of resources.
Electronic Funds Transfers includes CPA AFT (debits and credits), electronic remittances, and EDI transactions.
Bill payments to businesses that include data related to that business' Corporate Creditor Identification Number (CCIN) for credit to a corporation. Includes bill payments initiated via telephone and Internet banking and may include some paper-based bill payment remittances converted to EDI format by financial institutions.
Those who use, or are likely to use, services provided by payment systems (e.g. consumers, businesses, government)
A signature made by a holder of an item on the back of the Item when transferring (negotiating) it to another person.
Expedited Retail Payment Systems are retail payment systems that are integrated into core payment systems, which have direct central bank involvement (in clearing or settlement processes), and are designed with a purpose to exchange, clear, and provide funds access to payees in a timely basis.
The delivery and receipt of payment instructions, which would result in a debit and credit being posted to the accounts of the Payor and Payee
Payment cannot be revoked/reversed by any party involved
Faster Payments System, the ERPS established in the UK
Where the payor and the payee are the same, a PAD drawn on the account of a payor to transfer funds from their account at one member financial institution to their account at another member financial institution. Examples include registered savings plan, mutual funds, segregated funds, annuities, deposit accounts, cash accounts, and investment accounts.
Funds are delivered with finality to payee when the payee FI has certainty of credit from the payor
A member that, on its own behalf or on the behalf of the group's entitles, exchanges payment items and either effects clearing and settlement or makes entries into the ACSS.
High Value Payment Systems; a set of instruments and procedures that facilitates typically large-value inter-FI transfers with finality)
A digital representation of the front and back of a payment item.
Any paper output of an Image, created by a CPA member.
An entity that cannot meet the applicable eligibility criteria or for business reasons accesses the core payment system through an agency agreement (i.e., sponsorship) with a direct participant
A three digit number, assigned by Payments Canada, which can be used on payment items to identify a member financial institution or other institution listed in Appendix I of Rule D4.
Ability for payments to be processed (exchanged, cleared and settled) across multiple systems or jurisdictions (e.g., cross-border) without manual assistance; generally facilitated by adoption of common standards and/or technical compatibility
Know Your Customer. It involves the process of verifying the identity of clients, mainly to detect the use of money for illicit activities.
Ability to be read or deciphered by a human viewer.
Queuing arrangements in a payment system, where queued payments are released as part of a bilateral or multilaterally off-setting of payments. The use of the queue and the off-sets reduces the liquidity required to meet the controls to enable the transactions to be sent to other participants.
Large Value Payment System
Large Value Transfer System; an electronic wire system that facilitates the transfer of funds between participating financial institutions in real time with finality of payment and certainty of settlement
A payment item issued by a member and drawn on itself for the purpose of ordering a payment to be made to a payee.
Core payment systems that serve both an LVPS and a retail payment system functions.
The net amount that represents the difference between what is owed by each participant to all others and what others owe that participant.
Payment structures that as a group are critical to the economy but a shock or disruption in one system would likely have limited impact on consumers and business, limited risk of contagion, and would be less likely to affect the Canadian financial system and economy.
See collecting financial institution.
The process of establishing the amount owed by one FI to another by adjusting the mutual claims of each on the other. It allows participants to minimize the amount of liquidity necessary for settlement. Netting may be bilateral or multilateral, by position or by novation.
The underlying gross obligations are discharged by the netting process and replaced by a net obligation.
When a payment item is drawn on one financial institution and deposited to a different account within the same financial institution. On-Us payments do not result in a Payments Canada clearing entry (and do not appear in Payments Canada system data)
Payments initiated by a customer online for the purchase of goods or services in accordance with CPA Rule E2 that result in a credit from the customer's account at a financial institution to a merchant. Online payments include online e-wallet and electronic Person-to-Person (P2P) transactions, initiated through online services and providers that are prefunded or linked to deposit accounts at financial institutions (e.g., PayPal).
Payments accompanied by a paper remittance (bill stub), MICR-encoded with a CCIN, for credit to a business, generally initiated via an ABM or branch of a financial institution.
The end-user (person or organization) who receives funds when a payment item is credited to their account
The financial Institution that holds the account of the payee (person receiving a payment).
A business, association, government or other entity which, with authorization from a payee or payor, initiates an AFT transaction.
A person or an entity that provides services directly to end users such as consumers and businesses/corporates, banks or other entities to support exchange, clearing and settlement services
An entity responsible for managing and operating a payment system
The transfer of value from a payor to a payee through the intermediary of a financial institutions. Payments can be debit transfers or credit transfers authorized by the payor
All payment structures within a country.
The technology, rules, standards and procedures that underpin the transfer of monetary value between parties. The LVTS and ACSS are payments infrastructures owned and operated by Payments Canada and therefore governed by its by-laws, rules and/or standards.
The networks, processes, arrangements, rules, standards, protocols, conventions, and technologies that facilitate the transfer of monetary value.
All payment structures that facilitate the transfer of monetary value between banks.
The end-user (person or organization) who authorizes their financial institution to debit their account for the amount of a payment item
The financial institution that holds the account of the payor (person making a payment).
A pre-authorized debit drawn on a personal account. Examples include charitable donations, mortgage installments, utility bills, insurance premiums, membership fees, property taxes, credit card billings, etc.
Principles for Financial Market Infrastructures – the global risk standards established by the CPSS/CPMI and IOSCO for regulating payment and security clearing and settlement systems.
Until the net amount is paid, each party remains legally obligated for the underlying gross amounts.
A payment item issued by and drawn on Canada Post Corporation to order a payment to be made to a payee.
The process of debiting or crediting an end user’s deposit account and making funds available (with possible restrictions).
Public Policy Objectives – The public policy objectives for Payments Canada are to promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interest of users (defined by Department of Finance)
Payment structures for the clearing and settlement of payment obligations where a shock, disruption or failure of the system has the potential to affect, on a national scale, the ability of consumers and businesses to effect payments, thereby reducing confidence in the payments system more generally.
Payment Systems Directive, issued by the European Commission
Real-time refers to the exchange, clearing and settlement processes that take place instantaneously or no longer than one minute. Near-real time is used to describe processes that take place in under three minutes (but longer than one minute).
An entity (typically a public or government entity) with authority to define policy and supervise a particular business activity through the making and enforcement of standards and rules.
The portion of an invoice or the electronic data submitted to the payor's FI by the payor, along with payment, and which becomes a credit item representing value when exchanged by the payor's financial institution.
Retail payments are mainly consumer payments of relatively low value and urgency.
A form of an image printout that meets the specifications in Standard 013 and which may be used for the purpose of return in accordance with Rule A10.
A routing number identifies the financial institution and the branch to which a payment item is directed. Along with the account number, it is essential for delivering payments through the clearing system. In Canada, there are two formats for routing numbers: one for electronic payment items and one for paper payment items.
In Real Time Gross Systems, each payment is settled individually as soon as the transfer order is submitted and accepted for settlement.
A settlement system which couples final and irrevocable transactions with a DNS process, to emulate an RTGS experience for users. As a DNS system settlement is delayed to allow for netting of transactions across participants.
An RTGS that utilizes a central queue to rapidly off-set transactions between participants, to lower the collateral required to settle each transaction, over what would be needed if each transactions were settled on a real-time basis.
Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro.
An act that discharges obligations in respect of funds between two or more parties. For ACSS, it means the payment of clearing balances.
An account which is established and maintained by each direct clearer, at the Bank of Canada, or by each indirect clearer with its clearing agent(s), for the purpose of settlement.
Settlement Before Exchange systems use arrangements where participants must settle file batch totals before the files themselves may be exchanged
An item dated more than six (6) months prior to presentment for payment.
Straight-Through-Processing – the process of transmitting and reconciling a payment in an automated fashion, such that no human intervention is required.
An entity that controls the functioning of a system including its operating rules, policies and infrastructure. The entity may perform some or all of the functions or rely on a third party to perform some functions.
An entity that has the authority to assert certain rights and responsibilities in relation to a system, such as the right to develop, modify, operate and maintain the system or to introduce, modify, or discontinue a particular service or function.
A disruption to the payments ecosystem that has a material impact on ecosystem service providers or end users as a group.
A disruption to the payments ecosystem large enough to have a noticeable impact on GDP.
The failure of the payments ecosystem to ultimately settle on the books of the central bank.
Payment structures where a shock, disruption or failure could have serious and widespread impacts on the financial system and the economy.
A paper debit resembling a cheque that is not created or signed by the payor, but is drawn by a third party on behalf of the payor, purportedly with the payor's authorization given over the telephone or by other remote means.
An arrangement in payment systems whereby participants in one category require the services of participants in another category to exchange and/or settle transactions on their behalf.
The speed with which funds are initiated, processed, posted and made available to the recipient
A three digit code, as assigned by the CPA, used to identify the type of AFT payment. Transaction codes can be found in Appendix II, Section D of Standard 005.
A three-digit financial institution number together with a five-digit branch number assigned by that institution.
Ability to be seen without obstruction.