Payments Modernization will help foster a faster, safer and more data-rich payments environment. Besides the introduction of new systems – which will operate under an enhanced risk, regulatory and rules framework – the primary efficiency enhancement for all Canadians is anticipated to come from adopting the ISO 20022 data standard. Visit the Payments Canada ISO 20022 Resource Centre.
- Ability for sender to include a wide-range of messages along with payments enhancing payment clarity
- Enables straight-through processing of payment
- Supports greater efficiency by reducing need for manual inquiry about payment details – saving effort and costs
- Provides new revenue opportunities through new products/services, increased analytics and improved customer relationship management
The payments ecosystem in Canada (and around the world) is rapidly changing: Consumers and businesses want faster payments and access to funds, enhanced security and privacy. Businesses want richer payment data and operating environments that promote efficiencies like end-to-end straight-through processing. Also, the Department of Finance and the Bank of Canada – who both have oversight responsibilities for Payments Canada – have expressed strong support for payment system modernization for both risk reduction and promotion of the public policy objectives. Payments Canada’s payments infrastructure, rules and standards need to be updated to better enable payments providers to innovate and products and services to better meet end user needs. For more information on why Payments Canada is modernizing the Payments system, view the Companion Reader to the Vision or the Canadian Payment Ecosystem.
ISO 20022 is an international messaging standard designed to simplify global business communication. The standard enables efficient payments clearing and settlement among financial institutions globally through the use of a common set of messages and language that the institutions agree to use in a consistent way. It allows participants and systems across different financial markets (e.g. payments, securities, foreign exchange, cards) to communicate using consistent terminology or syntax, which supports interoperability and more remittance information within the payment message. It is an open standard that anyone can use, and to which anyone can contribute.
The expected benefits of ISO 20022 for Payments Canada system participants and their customers include: enhanced remittance data, support for global interoperability, efficiencies in managing multiple payments standards and a reduction in the use of paper-based payment options.