August 2, 2019 | Written by: Tracey Black
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The business of payments is fundamental to the Canadian economy. In 2016, estimated payments industry revenues were more than $16 billion. At Payments Canada we are at the epicenter of the payments industry, responsible for the safe and secure operation of Canada’s national payments systems, which clear and settle more than $200 billion every business day.
Today’s payments systems – which include Canada’s high-value system, the Large Value Transfer System (LVTS), and the retail batch payments system (ACSS) – support a vibrant economy and meet the current payments needs of Canadian consumers and businesses. But what about tomorrow?
Payments Modernization is a global trend addressing consumer and business needs for greater speed, flexibility and security. Currently more than 40 countries have enhanced or are in the process of enhancing their central payments infrastructure. In order to maintain Canada’s competitive position, we too are modernizing our country’s payments systems so Canadian businesses and consumers will have safe, secure and scalable payments infrastructure for years to come.
The Payments Canada Modernization Program is a complex initiative with far-reaching impacts on the entire Canadian financial services industry. Modernization will not only transform the clearing and settlement systems operated by Payments Canada, but also the systems and processes of our members. Payments Canada members will be able to leverage modernized payments infrastructure to provide faster, data-rich payment solutions to their customers.
Data-rich payments, supported by the ISO 20022 messaging standard, will be a game-changer. The ability to include more data with an electronic payment (for example, invoice details) will provide useful information about a payment for individuals, businesses and financial institutions. This additional payment data can be used by Canadian businesses to streamline their payment processes to deliver billions of dollars of savings annually. Modernization is an important initiative. Collaboration with our members and other industry stakeholders is and will continue to be essential.
Canada’s high-value payment system, LVTS, is being replaced with improved technology to ensure the evolution, and continued safety and soundness of Canada’s payments ecosystem. As the heart of the Canadian payments system, the new high-value payment system, Lynx, must be designed, delivered and operated flawlessly. For this, Payments Canada requires a technology partner that understands the importance of this high-value payment system to Canadians, the complexities of payments in Canada, the evolving nature of global payments and the importance of delivering value for Canadians. We found those qualities in IBM Canada, our lead technology partner for Lynx.
Our partnership with IBM Canada will ensure that Payments Canada delivers a high-value payments system that meets or exceeds the highest resilience, safety and security requirements. On that note, we are excited to work with IBM to support the evolution of the Canadian payments ecosystem.