This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)(Learn how and when to remove this template message)
Payments Canada (formerly the CPA, Canadian Payments Association) is an organisation that operates a payment clearing and settlement system in Canada. Payments Canada is a not-for-profit organization that: operates and maintains national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments; facilitates the interaction of Payments Canada’s systems with others involved in the exchange, clearing and settlement of payments; and facilitates the development of new payment methods and technologies.
Clearing and settlement systems
Clearing and settlement systems are essential to the smooth functioning of the economy. These systems allow financial institutions to calculate how much is owed to each other as a result of their customer's transactions and to transfer those funds to settle those balances.
Payments Canada operates three main clearing and settlement systems:
- The Large Transfer System (LTS) is Canada's primary system for clearing and settling large value, time critical Canadian dollar transactions. It provides participants and their customers with the certainty that, once a payment has passed the system's risk-control tests, the transactions are final and will settle on the books of the Bank of Canada the same day.
- The Automated Clearing Settlement System (ACS) is a system through which Canadian dollar checks and electronic payment items, such as direct deposits, ATM withdrawals, point of sale transactions, online payments and pre-authorized debit and bill payments are cleared and settled. The system tracks the exchange of payment items and the resulting balances due to and from direct participants.
- Payments Canada also operates the U.S. Dollar Bulk Exchange (USDB), a parallel system to the (ACSS) used for payment items in US dollars in Canada.
“In 2015, payment Canada’s systems cleared and settled over 7 billion payments totalling over $49.6 trillion - $196.8 billion on average each business day.” - Payments Canada 2014-2015 Annual Report
History and governance
Payments Canada was established in 1980 by an Act of Parliament, which was amended and renamed the Canadian Payments Act (CP Act) in 2001. The association has 135 members including the Bank of Canada, chartered banks, trust and loan companies, credit union centrals, federations of caisses populaires and other financial institutions. The Minister of Finance has oversight responsibilities for the CPA. The Governor of the Bank of Canada has oversight responsibility for the (LVTS) under the Payment Clearing and Settlement Act. The minister of finance makes three appointments to the board of directors and the Bank of Canada appoints the chair, while members elect the remaining 12 directors.
A 20-person Stakeholder Advisory Council (SAC) provides advice and input to represent the diverse interests of users of the payments system. The SAC was established by the Canadian Payments Association in 1996 on a voluntary basis and was formalized in the Canadian Payments Act in 2001. The SAC provides advice to the Payments Canada Board of Directors on payment, clearing, and settlement matters, and contributes input on proposed initiatives, including by-laws, policy statements, and rules that affect third parties. It also identifies issues that might concern payment system users and third-party service providers, and suggests how they could be addressed.
Another 20-person council was established in 2015 under the CP Act. “Payment Canada’s Member Advisory Council (MAC) serves as a consultative and engagement forum for Payment Canada’s members. It was created to ensure members continue to have a strong voice with the new majority-independent Board.” - Payments Canada 2014-2015 Annual Report
Payments Canada is administered by a full-time staff of approximately 80 and is headquartered in Ottawa.
The Canadian Payments Act also provides that the CPA must “promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interests of users”. Consumers, corporations, merchants, governments and payment service providers represent significant groups of system users, and as such, their interests are taken into account by the CPA in pursuing its objectives. Uniquely positioned as a consensus broker within the payments industry, the CPA ensures that significant rule changes follow an established public consultation process to seek input from key user groups. As an example of this consultation, in 2010 the CPA facilitated industry-wide innovation with frameworks for contactless debit payments. In 2012, the Association held consultations on ISO 20022
In 2014, Payments Canada released a 5-year corporate strategic plan. The core purpose of this strategic plan is to underpin the Canadian financial system and economy by providing safe, efficient and effective clearing and settlement of payments. Payments Canada has identified three long-term desired outcomes that will lead the organization to attaining their vision, addressing payment trends and managing risks. The long-term desired outcomes are as follows:
1. Modernize: Payments Canada is undertaking a multi-year program to modernize the core payments systems, including the rules, standards and technology infrastructure in order to ensure safe, secure and innovative systems for the coming years. 2. Operate and Enhance: While driving the Modernization changes, Payments Canada is continuing to ensure that the safety, efficiency and effectiveness of its current systems are met through required enhancements to technology resilience and rules and through changes that respond to business needs. 3. Transition and Renewal: To to be successful, Payments Canada must continue to build our organizational capacity and continue internal process improvements by focusing on leadership development, risk management, technology, operations and corporate administration.
Annual conference: Payments Canada Summit
The CPA holds Canada's largest payments conference on an annual basis. Until 2016, the conference was known as Payments Panorama and was held biennially.