MODERNIZING CANADA’S PAYMENTS ECOSYTEM OUR JOURNEY Ryan Grundy INDUSTRY RELATIONS LEAD, PAYMENTS CANADA April 17, 2019
AGENDA OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT
AGENDA OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT
PAYMENTS CANADA: CORE PURPOSE To underpin the Canadian financial system and economy by providing safe, efficient and effective clearing & settlement of payments.
PAYMENTS: CANADA’S LANDSCAPE Statistics: 2018 $16.4B 8B Payments industry Annual payment transactions $3M/sec $53T Cleared and settled Annual payment value
WE ENABLE CANADIAN COMMERCE
OUR SYSTEMS & SERVICES LVTS ACSS 2018 2018 Payments Total Volume Total Volume 9.5 Million 8 Billion Ca Canada Items Items Total Value Total Value $45.6 $53 Tr $5 Tril illi lion USBE USB Tri rill llio ion US Bulk FIF Exchange CSN CCIN FIF Financial Institution File CSN Payments Canada Services Network CCIN Corporate Creditor Identification Number
WHAT MAKES US UNIQUE
AGENDA OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT
PAYMENTS: MODERNIZATION VISION A modern payment system is fast, flexible and secure, promotes innovation and strengthens Canada’s competitive position
PAYMENTS: WHAT CANADIANS NEED Easie asier Data ata rich ch Transaction transparency Fast Fa Ope Open & & risk-based access Platform for inn nnovatio ion Cross-bord Cro rder convenience Activity-based ove vers rsig ight
CANADA’S FUTURE PAYMENTS SYSTEM MODERNIZE THE HE RULES S FRAMEWORK ALI LIGN WITH GLOBAL REGULATORY STANDARDS RET ETAIL PAYMENTS & ENH ENHANCED AUTOMATED FUN UNDS TR TRANSFER ES ESTABL BLISH A REA EAL-TIME CA CAPABILITY BUILD A NEW NEW HI HIGH-VALUE SYST STEM
PAYMENTS: OUR ROADMAP FUTURE STATE CURRENT STATE LVTS RTR RETAIL LYNX Real-Time Pay ayments & High-Value Hig Enhanced AF En AFT Payment System Larg rge Va Value Tr Transfer Payment System System (i.e .e. . wire res) Supports clearing of Processes large Adds new capability lower value, less time- value, time critical for real-time lower sensitive electronic payments in real- value payments, with ACSS and paper-based time with settlement immediate fund payments — replaces finality — replaces availability for the Automated Cleari ring ACSS LVTS payment recipient and Settlement System for r ba batch retail pa payments Standardized and data-rich messaging (ISO 20022) Updated policy and rules framework Enhanced risk models and oversight
IN FOCUS: LYNX Large-value Strict risk Real-time ISO 20022 critical management finality enabled payments
IN FOCUS: RETAIL BATCH PAYMENTS Two-hour Enhanced Addition of Improved Broadened third funds risk safety & access availability soundness exchange oversight
IN FOCUS: REAL-TIME PAYMENTS Rich Standardized Robust Finality & Alias Immediate remittance APIs. settlement & irrevocability management 24x7x365 data risk model (ISO 20022 )
IN FOCUS: ISO 20022 Greater Opportunity Improved Enhanced Interoperability efficiency & for cost analytics & fraud on an straight- savings & opportunities prevention & international through new revenue to innovate data security scale processing opportunities
IN FOCUS: BENEFITS Greater Enriched data Harmonization Transparency Enhanced risk efficiency & and analytics across into payment & controls & straight- payment types treasury flows oversight through & regions processing
MODERNIZATION MULTI – YEAR ROADMAP Published December 2018.
AGENDA OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT
WHAT BUSINESSES WANT HIGH LIMITS DATA WITH FINALITIES ON REAL TIME PAYMENTS SPEED BATCH TRANSPARENCY (AR ONLY) EFFICIENCY 21
WE HEARD: ENRICHED DATA WITH PAYMENTS Current pain points: “ We have a full time team of 20 people reconciling payments we send and receive due to limited data and high cheque volumes. We can’t believe it’s still like this because this [receivables] process should be automated” – Large Retailer • Manual reconciliation processes • High payments processing costs • Limitations in forecasting and analysis
WE HEARD: INCREASED PAYMENTS TRANSPARENCY Current pain points: “ Highly regulated goods such as liquor require confirmation of payment receipt prior to dispatching shipments, and delays in receiving confirmation can often push our shipments out by weeks” - Government • Limited visibility into payment statuses • Delivery of goods and services are impacted • Lengthy manual tracking processes
WE HEARD: FRICTIONLESS CROSS BORDER PAYMENTS Current pain points: “Our main problem with cross border is that the payment isn’t received until hours later and we can’t see what the intermediary bank has done with it because we lack visibility there“ - Large Railway • Intensive manual processes • Payments are routinely delayed • Lack of fee transparency
WE HEARD: PAYMENT ROUTING Current pain points: “The payment initiation form requires us to fill out many fields meaning a lot can go wrong. We would benefit from simplifying the payment initiation process so we can avoid misdirecting payments to new suppliers” - Large Retailer • Storing sensitive data poses risk • Non standardized use of biller directory
WE HEARD: HIGHER LIMITS Current pain points: “ Interac e-Transfer does not support higher limits today and therefore cannot be used as the prominent method of sending and receiving loan top- ups” - Fintech Financial • Current Interac e-transfer limits are low • Other payment attributes are pre-requisite for adoption
WE HEARD: SPEED OF PAYMENTS Current pain points: "Real-time payments may be useful in emergency situations such as working with the Red Cross” – Financial Services • Flexibility in payables • Specific use cases require speed
WE HEARD: FINALITY Current pain points: “The 90 day reversal period on EFTs has been a major pain point for us, the feature is meant to protect consumers but it’s really serving the fraudsters 99% of the time” – Fintech Financial • Flexibility in payables • Specific use cases require speed
AGENDA OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT
REGISTER NOW Attend The SUMMIT The SUMMIT is the forum to connect the payments ecosystem, offering a broad spectrum of topics that influence payments in Canada and around the world. For two and a half days, our 1,800 delegates will experience in-depth learning from multiple keynote addresses and breakout sessions, an interactive exhibit space, engaging networking opportunities, and evening social events. Registration now open at thesummit.ca Beanfield Centre, Toronto PROMO CODE 4RYG019SUMM for 40% off thesummit.ca
PAYMENTS CANADA RESOURCES AND SUPPORT
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