MODERNIZING CANADAS PAYMENTS ECOSYTEM OUR JOURNEY Ryan Grundy - - PowerPoint PPT Presentation

OUR JOURNEY

MODERNIZING CANADA’S PAYMENTS ECOSYTEM

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

$3M/sec

Cleared and settled

8B

Annual payment transactions

$53T

Annual payment value

$16.4B

Payments industry Statistics: 2018

WE ENABLE CANADIAN COMMERCE

OUR SYSTEMS & SERVICES

FIF Financial Institution File CSN Payments Canada Services Network CCIN Corporate Creditor Identification Number

Payments Ca Canada

USB USBE

US Bulk Exchange FIF CSN CCIN

ACSS

2018 Total Volume

8 Billion Items

Total Value

$5 $53 Tr Tril illi lion

LVTS

2018 Total Volume

9.5 Million Items

Total Value

$45.6 Tri rill llio ion

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

Fa Fast Data ata rich ch Transaction transparency Easie asier Cro Cross-bord rder convenience Activity-based ove vers rsig ight Ope Open & & risk-based access Platform for inn nnovatio ion

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

CURRENT STATE

PAYMENTS: OUR ROADMAP

Larg rge Va Value Tr Transfer System (i.e .e. . wire res) Automated Cleari ring and Settlement System for r ba batch retail pa payments

LVTS ACSS

FUTURE STATE

LYNX

Hig High-Value Payment System

RETAIL

Pay ayments & En Enhanced AF AFT

RTR

Real-Time Payment System

 Processes large value, time critical payments in real- time with settlement finality—replaces LVTS  Supports clearing of lower value, less time- sensitive electronic and paper-based payments—replaces ACSS  Adds new capability for real-time lower value payments, with immediate fund availability for the payment recipient  Standardized and data-rich messaging (ISO 20022)  Updated policy and rules framework  Enhanced risk models and oversight

Strict risk management

IN FOCUS: LYNX

Large-value critical payments ISO 20022 enabled Real-time finality

Addition of third exchange

IN FOCUS: RETAIL BATCH PAYMENTS

Two-hour funds availability Enhanced safety & soundness Improved risk

• versight

Broadened access

Finality & irrevocability Robust settlement & risk model Immediate 24x7x365 Rich remittance data (ISO 20022 )

IN FOCUS: REAL-TIME PAYMENTS

Standardized APIs. Alias management

IN FOCUS: ISO 20022

Opportunity for cost savings & new revenue

• pportunities

Enhanced fraud prevention & data security Greater efficiency & straight- through processing Improved analytics &

• pportunities

to innovate Interoperability

• n an

international scale

IN FOCUS: BENEFITS

Enriched data and analytics Transparency into payment & treasury flows Greater efficiency & straight- through processing Harmonization across payment types & regions Enhanced risk controls &

• versight

MODERNIZATION MULTI – YEAR ROADMAP

Published December 2018.

AGENDA

OVERVIEW: PAYMENTS CANADA MODERNIZATION: CANADA MODERNIZATION: END USERS PAYMENTS CANADA: THE SUMMIT

WHAT BUSINESSES WANT

21

DATA WITH PAYMENTS HIGH LIMITS ON REAL TIME BATCH EFFICIENCY SPEED (AR ONLY) TRANSPARENCY FINALITIES

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

• ut 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

Beanfield Centre, Toronto

thesummit.ca

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

• pportunities, and evening social events.

Registration now open at thesummit.ca PROMO CODE 4RYG019SUMM for 40% off

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