2019 federal budget includes measures to improve the Canadian payment system
Retail Payments Oversight Framework represents a step forward for payments industry
Canada’s federal government yesterday announced Budget 2019, Investing in the Middle Class, which supports payments innovation and changes to safeguard the funds and payments data of Canadians. Most notable to the payments ecosystem is the government’s proposed functional, risk-based approach to retail payments oversight. The framework will help level the playing field by bringing newer entrants under regulation and act as the foundation for broader, risk-based access to Canada’s retail payments ecosystem, an objective of Canada’s payments Modernization program.
“The proposed retail payments oversight framework acknowledges the shifting payments landscape and is an important step towards ensuring safety and soundness while facilitating innovation in the space,” said Gerry Gaetz, President & CEO of Payments Canada. “The framework - and its oversight by the Bank of Canada - is a welcome addition to Canada’s payments systems governance.”
Payments Canada is currently leading efforts to modernize Canada’s core payments infrastructure, including technologies, rules and standards. The retail payments oversight framework supports more open and risk-based access to the payment ecosystem, a key need identified in Canada’s vision for modern payments by existing Payments Canada members, payment service providers and new entrants in the marketplace. The appropriate balance of openness and security will encourage new entrants, competition and, ultimately, innovative solutions to meet the growing consumer demand for speed and convenience in payments.
Another important measure is an assessment by the government of the best path forward for Open Banking in Canada. Open Banking has the potential to offer Canadian consumers a secure way to consent to sharing their financial transaction data - allowing them to benefit from a broader range of financial products and services - as well as new opportunities for financial institutions and others.
Also of note was a commitment to make improvements to the Canadian Payments Act, which will help Payments Canada execute on its mandate.
About Payments Canada
Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2019 was over $55 trillion or $218 billion each business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and the 30% Club.
