Canada: CPA Issues Consultation Paper On Vision For Canadian Payment Ecosystem

On April 20, 2016, the Canadian Payments Association (the "CPA") released a consultation paper "Developing a vision for the Canadian payment ecosystem" (the "Consultation Paper"), outlining its planned vision for the proposed modernization of the Canadian payments system. The Consultation Paper was issued following the CPA's consultation with broad classes of stakeholders including financial institutions, fintechs, businesses, government and consumers.

Key Findings from Stakeholder Consultations

The Consultation Paper describes the CPA's findings from its broad industry consultation on user needs. Stakeholders identified the following features as desirable features for a modernized Canadian payments system:

  • Near real-time availability of funds – when making a payment, funds should ideally be made available to the recipient in 60 seconds or less. While some types of payments (for example Interac e-transfers) currently clear fairly quickly, other types of payments (such as wires) can take a long time to clear, as anyone who has spent several hours waiting for a wire to clear on a large transaction is well aware. While not all transactions need to occur in real time (for example, pre-authorized and pre-scheduled payments may not be as time sensitive), businesses expressed the need for a better solution than wires for time sensitive payments.
  • 24/7/365 availability – Real-time payments should be able to be conducted at all times of the day/ week/ year, rather than only during business hours.
  • Enhanced payment data – The payor should be able to include data about a payment when sending the payment (similar to the information line available on a cheque right now). Such data could be very powerful and could, for example, be leveraged by accounting software to automate invoice reconciliation. In this respect, Canada is in the process of adopting ISO20022, an international payments standard, which includes this feature (for further detail on ISO20022 and potential privacy and security concerns relating to the adoption of ISO20022, please see our prior post " First Draft of ISO 20022 Standard for Real-Time Payments Released, Raises Potential Privacy and Security Concerns").
  • Transparency of payment status – Both the sender and recipient of a payment should receive automatic notification on payment status (such as currently done for Interac e-transfers for example) and should be able to track a transaction in real time (similar for example, to courier package tracking).
  • Routing of payments through information other than banking information– Payors should be able to send payments to a recipient by using information other than banking information, such as, for example, a telephone number or email address. This would serve to both protect the privacy and security of sensitive banking information (since this information would not have to be communicated) and also to make sending payments easier and more convenient.
  • Improvement of cross-border payments – Cross-border payments should be faster, more efficient and more transparent. Both businesses and consumers expressed frustration with the current state of cross-border payments. To ensure cross-border payments in a modernized system are as efficient as possible, the CPA should ensure interoperability with international standards. The planned adoption of ISO2002 in Canada is a key component of achieving such interoperability.

In terms of regulatory framework, the CPA noted that various stakeholders favoured regulatory oversight that would support payment innovation in Canada. In particular, participants in the payment system favoured functional regulation of payment entities (where entities are regulated based on the type of service provided rather than on the type of entity they are), and were of the view that regulation should be based on outcomes rather than process, and that regulation should be principles-based rather than prescriptive. New entrants (such as fintechs) also expressed the need for improved access to the payment system. Achieving long-term cost efficiencies was also identified as a goal for the modernization of the Canadian clearing and settlement system.

Global Context

Canada is part of the second wave of countries undergoing payment system modernization. A first wave of countries (which includes the UK, Brazil, Denmark and Singapore) have already completed their payments modernization process. The second wave of countries is still in the planning, design or build stage, and includes Canada, the US and Australia. The Clearing House in the U.S. is anticipating providing ISO20022-compliant real time payments by 2017.

Being part of the second wave, Canada is in a good position to take advantage of the lessons learned by the first wave. The Consultation Paper lists the following best practices learned from a review of other countries' experiences:

  • Build a new payment system – Most countries are building a new, standalone system rather than attempting to modify existing infrastructure. Building a new system on the whole appears to be less expensive and faster than attempting to modify existing payment systems.
  • Leverage existing resources – While the first wave of countries had to spend considerable resources into building new custom built solutions, the second wave is able to benefit from "off the shelf" options created following the first wave. It may also be possible to leverage some of the existing infrastructure to increase efficiencies.
  • Ensure appropriate incentives – While some initial modernization efforts have been mostly government mandated, more recent efforts tend to be more focused on addressing user needs.
  • Support adoption of near-real time products – There should be an alignment between the modernization effort and the commercialization of real-time payment applications (typically P2P solutions), to drive early adoption of the new payment system.
  • Support B2B functionality – While P2P solutions have generally been offered first, B2B solutions offer the most substantial value and modernization efforts should also ensure to address B2B needs, including the need for speed, scale and data.
  • Consider all types of payments – Modernization initiatives should not just focus on immediate needs for near real-time payments but also provide for longer term changes such as enhancing batch retail and high-value systems.

It is clear from the scope and depth of the Consultation Paper that the CPA is taking a very deliberate, inclusive, transparent and thoughtful approach to the modernization process, in an effort to most efficiently build a new Canadian payment system that encourages innovation and addresses user needs of the various types of participants in the payments ecosystem. In particular, the Consultation Paper points to the key importance of data and transparency in a modernized payment system, while recognizing the need to include features addressing privacy and security concerns.

To view original article, please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.