Payments Training Hub
Payments Canada modernisation PAYMENT OPERATIONS STARTED LIVE 01 Payments Canada modernisation - modernised its payment systems through ACTIVE 02 Modernisation programme set out to replace - modern, ISO 20022 based QUEUED 03 Cheques - because image-based clearing already QUEUED 04 Supplier payment that once took two - cheque can now arrive in seconds QUEUED 05 Lessons from Canada - modernising its payments QUEUED 06 And - because ISO 20022 messages hold more QUEUED Canada modernised its payment systems through Payments Canada Step 1 of 6 Payments Canada modernisation STARTED Payments Canada modernisation modernised its payment systems through ACTIVE Modernisation programme set out to modern, ISO 20022 based systems that could QUEUED Cheques because image-based clearing already QUEUED Supplier payment that once took two cheque can now arrive in seconds QUEUED Lessons from Canada modernising its payments QUEUED And because ISO 20022 messages hold more QUEUED Canada modernised its payment systems through Payments Canada
Modernisation programme set out to replace them PAYMENT OPERATIONS IN PROGRESS LIVE 01 Payments Canada modernisation - modernised its payment systems through DONE 02 Modernisation programme set out to replace - modern, ISO 20022 based ACTIVE 03 Cheques - because image-based clearing already QUEUED 04 Supplier payment that once took two - cheque can now arrive in seconds QUEUED 05 Lessons from Canada - modernising its payments QUEUED 06 And - because ISO 20022 messages hold more QUEUED The modernisation programme set out to replace them with modern, ISO 20022 based systems that could settle faster, carry richer data and support new products. Step 2 of 6 Modernisation programme set out to replace them IN PROGRESS Payments Canada modernisation modernised its payment systems through DONE Modernisation programme set out to modern, ISO 20022 based systems that could ACTIVE Cheques because image-based clearing already QUEUED Supplier payment that once took two cheque can now arrive in seconds QUEUED Lessons from Canada modernising its payments QUEUED And because ISO 20022 messages hold more QUEUED The modernisation programme set out to replace them with modern, ISO 20022 based systems that could settle faster, carry richer data and support new products.
Cheques: part of this story PAYMENT OPERATIONS IN PROGRESS LIVE 01 Payments Canada modernisation - modernised its payment systems through DONE 02 Modernisation programme set out to replace - modern, ISO 20022 based DONE 03 Cheques - because image-based clearing already ACTIVE 04 Supplier payment that once took two - cheque can now arrive in seconds QUEUED 05 Lessons from Canada - modernising its payments QUEUED 06 And - because ISO 20022 messages hold more QUEUED Cheques are part of this story, because image-based clearing already shortened the cheque timeline, Step 3 of 6 Cheques: part of this story IN PROGRESS Payments Canada modernisation modernised its payment systems through DONE Modernisation programme set out to modern, ISO 20022 based systems that could DONE Cheques because image-based clearing already ACTIVE Supplier payment that once took two cheque can now arrive in seconds QUEUED Lessons from Canada modernising its payments QUEUED And because ISO 20022 messages hold more QUEUED Cheques are part of this story, because image-based clearing already shortened the cheque timeline,
Supplier payment that once took two days PAYMENT OPERATIONS IN PROGRESS LIVE 01 Payments Canada modernisation - modernised its payment systems through DONE 02 Modernisation programme set out to replace - modern, ISO 20022 based DONE 03 Cheques - because image-based clearing already DONE 04 Supplier payment that once took two - cheque can now arrive in seconds ACTIVE 05 Lessons from Canada - modernising its payments QUEUED 06 And - because ISO 20022 messages hold more QUEUED A supplier payment that once took two days by cheque can now arrive in seconds on the Real-Time Rail Step 4 of 6 Supplier payment that once took two days IN PROGRESS Payments Canada modernisation modernised its payment systems through DONE Modernisation programme set out to modern, ISO 20022 based systems that could DONE Cheques because image-based clearing already DONE Supplier payment that once took two cheque can now arrive in seconds ACTIVE Lessons from Canada modernising its payments QUEUED And because ISO 20022 messages hold more QUEUED A supplier payment that once took two days by cheque can now arrive in seconds on the Real-Time Rail
Lessons from Canada apply to any country PAYMENT OPERATIONS IN PROGRESS LIVE 01 Payments Canada modernisation - modernised its payment systems through DONE 02 Modernisation programme set out to replace - modern, ISO 20022 based DONE 03 Cheques - because image-based clearing already DONE 04 Supplier payment that once took two - cheque can now arrive in seconds DONE 05 Lessons from Canada - modernising its payments ACTIVE 06 And - because ISO 20022 messages hold more QUEUED The lessons from Canada apply to any country modernising its payments, and they are the same lessons a business analyst meets on every large programme. Step 5 of 6 Lessons from Canada apply to any country IN PROGRESS Payments Canada modernisation modernised its payment systems through DONE Modernisation programme set out to modern, ISO 20022 based systems that could DONE Cheques because image-based clearing already DONE Supplier payment that once took two cheque can now arrive in seconds DONE Lessons from Canada modernising its payments ACTIVE And because ISO 20022 messages hold more QUEUED The lessons from Canada apply to any country modernising its payments, and they are the same lessons a business analyst meets on every large programme.
And carry the data forward PAYMENT OPERATIONS COMPLETE LIVE 01 Payments Canada modernisation - modernised its payment systems through DONE 02 Modernisation programme set out to replace - modern, ISO 20022 based DONE 03 Cheques - because image-based clearing already DONE 04 Supplier payment that once took two - cheque can now arrive in seconds DONE 05 Lessons from Canada - modernising its payments DONE 06 And - because ISO 20022 messages hold more ACTIVE And carry the data forward, because ISO 20022 messages hold more information than the old formats, Step 6 of 6 And carry the data forward COMPLETE Payments Canada modernisation modernised its payment systems through DONE Modernisation programme set out to modern, ISO 20022 based systems that could DONE Cheques because image-based clearing already DONE Supplier payment that once took two cheque can now arrive in seconds DONE Lessons from Canada modernising its payments DONE And because ISO 20022 messages hold more ACTIVE And carry the data forward, because ISO 20022 messages hold more information than the old formats,

Key points of this lesson, in order.

0:00 / 3:01 Step 1 of 6

Payment Systems Modernisation: The Canada Example

Cheques and Paper Instruments, Lesson 6 of 7, Narration 3:01, D01 Foundations of money and payments

ReconciliationSettlementISO 20022

What you will learn

Your objective. By the end of this lesson, you will be able to explain payment systems modernisation: the canada example. Canada modernised its payment systems through Payments Canada, the organisation that operates the country clearing and settlement systems, because the old infrastructure was built for paper and batch processing and.

Why it matters. Modernisation changes what a business analyst must design, because the same payment can now travel on different rails with different speeds, costs and data.

Chapter objective: Paper instructions, clearing and the pull model

Key learning points

  • Payments Canada modernisation
  • Modernisation programme set out to replace them
  • Cheques: part of this story
  • Supplier payment that once took two days
  • Lessons from Canada apply to any country
  • Carrying the data forward: ISO 20022 holds more information

Key terms

Reconciliation: The process of comparing records from two sources, such as a bank statement and an internal ledger, to confirm they agree.

Settlement: The final movement of funds between banks to discharge obligations created by cleared payments. Settlement is usually made in central bank money or through correspondent accounts.

ISO 20022: An international standard for financial messaging that defines XML message formats for payments, securities and trade.

Payment flow diagram showing Payment Systems Modernisation: The Canada Example.

Practise this lesson

Exercise

Read the ISO 20022 based message described in this lesson and identify its key parts.

Use the message structure, fields and example in this lesson.

  1. What to do. List the main blocks of the message, name the field that carries the amount, and name the field that identifies the payment.

Correct result. The message is made of blocks, each carrying a part of the payment instruction. The amount field and the identification field are the two a receiving bank checks first, because without them it cannot process or reconcile the payment.

Why. A message is only useful if you can read it. The blocks tell the receiving bank what to do, and the amount and identification fields are what it checks first.

Check your understanding

Practice question

Which of the following best describes payment systems modernisation: the canada example?

Takeaway and next step

What to remember

And carry the data forward, because ISO 20022 messages hold more information than the old formats, and a modernisation that drops data will break the reconciliation that businesses depend on every day.

Follow a payment through every stage, from instruction to beneficiary credit, and note where it can stop.

Open the Payment Lifecycle Simulator →

Builds on "When a Cheque Bounces".

Transcript and full text

Show transcript

Canada modernised its payment systems through Payments Canada, the organisation that operates the country clearing and settlement systems, because the old infrastructure was built for paper and batch processing and could not support real time payments. The legacy systems included the Large Value Transfer System for high value payments and the Automated Clearing Settlement System for batch payments, including cheques, direct debits and bill payments. Those systems worked, but they were slow, they used old message formats, and they could not give a payee immediate confirmation that a payment had arrived. The modernisation programme set out to replace them with modern, ISO 20022 based systems that could settle faster, carry richer data and support new products. The centrepiece of the Canadian modernisation is the Real-Time Rail, a system that lets a payment move between accounts in seconds, at any hour, with immediate confirmation to both the payer and the payee. Alongside it, Canada is rebuilding its batch clearing to use ISO 20022 messages, so a payment can carry structured remittance data that a business system can reconcile automatically. Cheques are part of this story, because image-based clearing already shortened the cheque timeline, and the new systems give businesses a faster electronic alternative, which reduces the need for paper over time. The programme is delivered in stages, so the old systems keep running while the new ones are built, tested and moved into production, which avoids a single risky cutover. Modernisation changes what a business analyst must design, because the same payment can now travel on different rails with different speeds, costs and data. A supplier payment that once took two days by cheque can now arrive in seconds on the Real-Time Rail, but the payer must provide richer data, and the payee system must handle an immediate credit. A product owner should consider which customers need real time settlement and which are happy with batch, because real time costs more to build and to run, and not every payment needs it. The analyst must also plan for the coexistence period, when some payments use the old batch system and others use the new rail, and the reconciliation must handle both without double counting. The lessons from Canada apply to any country modernising its payments, and they are the same lessons a business analyst meets on every large programme. Start with the user need, not the technology, because a faster system only helps if it solves a real problem for a payer or a payee. Deliver in stages, because a big bang replacement of a national payment system is too risky to attempt in one step. Keep the old system running until the new one is proven, because a payment system cannot be switched off for a weekend while the replacement is tested. And carry the data forward, because ISO 20022 messages hold more information than the old formats, and a modernisation that drops data will break the reconciliation that businesses depend on every day.

Canada modernised its payment systems through Payments Canada, the organisation that operates the country clearing and settlement systems, because the old infrastructure was built for paper and batch processing and could not support real time payments. The legacy systems included the Large Value Transfer System for high value payments and the Automated Clearing Settlement System for batch payments, including cheques, direct debits and bill payments. Those systems worked, but they were slow, they used old message formats, and they could not give a payee immediate confirmation that a payment had arrived. The modernisation programme set out to replace them with modern, ISO 20022 based systems that could settle faster, carry richer data and support new products.

The centrepiece of the Canadian modernisation is the Real-Time Rail, a system that lets a payment move between accounts in seconds, at any hour, with immediate confirmation to both the payer and the payee. Alongside it, Canada is rebuilding its batch clearing to use ISO 20022 messages, so a payment can carry structured remittance data that a business system can reconcile automatically. Cheques are part of this story, because image-based clearing already shortened the cheque timeline, and the new systems give businesses a faster electronic alternative, which reduces the need for paper over time. The programme is delivered in stages, so the old systems keep running while the new ones are built, tested and moved into production, which avoids a single risky cutover.

Modernisation changes what a business analyst must design, because the same payment can now travel on different rails with different speeds, costs and data. A supplier payment that once took two days by cheque can now arrive in seconds on the Real-Time Rail, but the payer must provide richer data, and the payee system must handle an immediate credit. A product owner should consider which customers need real time settlement and which are happy with batch, because real time costs more to build and to run, and not every payment needs it. The analyst must also plan for the coexistence period, when some payments use the old batch system and others use the new rail, and the reconciliation must handle both without double counting.

The lessons from Canada apply to any country modernising its payments, and they are the same lessons a business analyst meets on every large programme. Start with the user need, not the technology, because a faster system only helps if it solves a real problem for a payer or a payee. Deliver in stages, because a big bang replacement of a national payment system is too risky to attempt in one step. Keep the old system running until the new one is proven, because a payment system cannot be switched off for a weekend while the replacement is tested. And carry the data forward, because ISO 20022 messages hold more information than the old formats, and a modernisation that drops data will break the reconciliation that businesses depend on every day.

Full lesson text (all scenes)

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