A forthcoming overhaul of Canada’s electronic payments systems will produce tangible benefits for corporate stakeholders, particularly in the field of remittance transactions, according to a new report.
Published on 7 March, the paper from the Canadian Payments Association (CPA) reveals how the group will be transformed by a programme to modernise its services and bring them in line with the ISO 20022 quality standard.
As the report explains, Canada’s existing payments systems “are limited in the amount of remittance information they can support”, because their infrastructure is around 30 years old and transmits only small, “fixed-length” records of accompanying information. Batches of remittance data, however, far exceed that capacity.
“The inability to exchange remittance information,” says the report, “is viewed as an impediment to greater adoption of electronic payments.” As a result, businesses either continue to rely upon paper-based methods, or send remittance details separately from the actual payments – forcing the CPA to wade through a host of different data formats.
Quoted in the report, Canadian National Rail senior credit and payment manager Jack Fucale highlights those trends. “One of our company’s biggest challenges is in supporting the high number of its customers who are sending electronic payments with separate remittance data,” he says.
“Due to the variety of formats and the lack of integration, it is currently more efficient and requires less effort to process cheques than electronic funds transfer payments.”
He adds: “As there is no single remittance format in place today, it’s ‘the sooner the better’ for Corporate Canada to implement and adopt the new standard.”
As part of the CPA’s ISO compliance drive, its systems will be refreshed to support the extended remittance information protocol. That will allow remittance data to be bundled up with the payment itself or, in cases where it must be sent separately, transmitted in a single, unified format.
According to the report, the key benefits for stakeholders will be:
Global electronic payments cooperative SWIFT will help the CPA with the upgrade, planned as a phased, multi-year venture rather than a ‘big bang’ project, to suit industry players with different technological capabilities.
CPA payments innovations director Mark Brule said: “This will provide downstream benefits for our members, stakeholders and customers by reducing the heavy reliance on integration, manual processes and multiple, disparate payment standards.”