A speedier and more efficient payments system for Canada /

The two most recent reviews of the Canadian payments system – by the federal Task Force for the Payments System Review (2011) and the Canadian Payments Association (2008) – have found that the needs of payments’ system users, especially businesses, are not being adequately met. [...] More recently, the Bank of Canada also recognized the need for a faster and more efficient payment regime and suggested that the best way to achieve this is to eliminate the existing unequal approach to low- and high- value payments (Schembri 2014). [...] In the next stage, the payee’s bank credits the payee’s account and sends the cheque, either in a paper or an electronic format, to a cheque-processing firm.5 The processing firm scans all the paper cheques it receives and forwards them electronically to the payer’s bank. [...] Although the payee’s bank credited the payee’s account when it first received the cheque, the payee’s bank will subsequently debit the payee’s account in the amount of the cheque plus a fee if the payer’s bank refuses to honour the payment. [...] The Canadian Payments Association (CPA), a member-based non-profit organization, operates the clearing and settlement infrastructure responsible for 80 percent of the value and 55 percent of the total payments in the Canadian economy.6 Large banks and other deposit-taking institutions constitute the backbone of CPA membership and participate directly in its clearing and settlement arrangements.