The minimum conditions that an entity would need to satisfy in order to participate directly (or indirectly) in a payment system.  Access criteria may differ depending on what role the entity will perform as a participant in the system (e.g. exchange of payment messages, clearing or settlement with the central bank)

Automated Clearing Settlement System; a batch total entry system used to enter batch totals for transactions exchanged by CPA member direct clearers. The ACSS calculates multilateral net positions to determine the balances due to and from participants; includes rules and standards that prescribe how payments should be made between direct clearers

The process by which the identity of a User who wishes to access a system or service is confirmed.  Authentication protocols may take many forms depending on whether validation is being done in person or electronically 

Direct deposits to an account held at a financial institution. Commonly used for payroll. Also known as AFT credit.

The point at which a payee can withdraw and use funds (which may occur before the participating FIs settle)

Canada's central bank; it is not a commercial bank and does not offer banking services to the public. Responsible for Canada's monetary policy, bank notes, financial system and funds management.

The net amount that represents the difference owed between pairs of participants.

A five digit number (including leading zeros) assigned by a financial institution to identify a branch. Branch numbers can be found in the Financial Institutions File and in the Financial Institutions Branch Directory.

A pre-authorized debit drawn on the account of a payor for the payment of goods or services related to a business or commercial activity of the payor. For example, payments between franchisees and franchisers, distributors and suppliers, and dealers and manufacturers.

A secure electronic payment system used to accept, transmit, process, authenticate and authorize transactions made by payment card (credit or debit) and to transfer information and funds among participants and payment card users

Payments are exchanged, cleared and settled through a single central system, where they are routed and validated by a central institution

An item on the face of which the drawee financial institution has written or stamped the words "accepted" or "certified" or any other word or words to that effect.

Commonly understood to mean the process of transmitting, reconciling and, in some cases, confirming payment orders prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement.  For the purposes of ACSS, it means the reconciliation of payment items that were exchanged and the calculation of net totals for settlement

The total of the net amounts owing to or by a member as a result of clearing.

A core payment system is defined as one that (i) includes at least clearing and settlement, where settlement occurs in central bank funds, and (ii) is central to the efficiency and stability of the financial system and economy.

A paper item that appears to be original or genuine, but has been fraudulently made.

Payments are exchanged, cleared and settled through multiple point-to-point systems, where they are routed and validated by the participants

An entity(e.g. financial institution) that meets the applicable access criteria to access a  payment system directly (without sponsorship or agency agreement with other bank/payment services provider)

The financial institution to which a debit payment item is addressed and which is directed to pay the specified amount of money.

Electronic Funds Transfers includes CPA AFT (debits and credits), electronic remittances, and EDI transactions.

Those who use, or are likely to use, services provided by payment systems (e.g. consumers, businesses, government)

Expedited Retail Payment Systems are retail payment systems that are integrated into core payment systems, which have direct central bank involvement (in clearing or settlement processes), and are designed with a purpose to exchange, clear, and provide funds access to payees in a timely basis.

Financial Institution

Faster Payments System, the ERPS established in the UK

Funds are delivered with finality to payee when the payee FI has certainty of credit from the payor

High Value Payment Systems; a set of instruments and procedures that facilitates typically large-value inter-FI transfers  with finality)

Any paper output of an Image, created by a CPA member.

A three digit number, assigned by Payments Canada, which can be used on payment items to identify a member financial institution or other institution listed in Appendix I of Rule D4.

Know Your Customer. It involves the process of verifying the identity of clients, mainly to detect the use of money for illicit activities.

Queuing arrangements in a payment system, where queued payments are released as part of a bilateral or multilaterally off-setting of payments. The use of the queue and the off-sets reduces the liquidity required to meet the controls to enable the transactions to be sent to other participants.

Large Value Transfer System; an electronic wire system that facilitates the transfer of funds between participating financial institutions in real time with finality of payment and certainty of settlement

Core payment systems that serve both an LVPS and a retail payment system functions. 

Payment structures that as a group are critical to the economy but a shock or disruption in one system would likely have limited impact on consumers and business, limited risk of contagion, and would be less likely to affect the Canadian financial system and economy.

The process of establishing the amount owed by one FI to another by adjusting the mutual claims of each on the other. It allows participants to minimize the amount of liquidity necessary for settlement. Netting may be bilateral or multilateral, by position or by novation.

When a payment item is drawn on one financial institution and deposited to a different account within the same financial institution.  On-Us payments do not result in a Payments Canada clearing entry (and do not appear in Payments Canada system data)

Payments accompanied by a paper remittance (bill stub), MICR-encoded with a CCIN, for credit to a business, generally initiated via an ABM or branch of a financial institution.

The financial Institution that holds the account of the payee (person receiving a payment).

A person or an entity that provides services directly to end users such as consumers and businesses/corporates, banks or other entities to support exchange, clearing and settlement services

The transfer of value from a payor to a payee through the intermediary of a financial institutions. Payments can be debit transfers or credit transfers authorized by the payor

The technology, rules, standards and procedures that underpin the transfer of monetary value between parties. The LVTS and ACSS are payments infrastructures owned and operated by Payments Canada and therefore governed by its by-laws, rules and/or standards.

All payment structures that facilitate the transfer of monetary value between banks.

The financial institution that holds the account of the payor (person making a payment).

Principles for Financial Market Infrastructures – the global risk standards established by the CPSS/CPMI and IOSCO for regulating payment and security clearing and settlement systems.

A payment item issued by and drawn on Canada Post Corporation to order a payment to be made to a payee.

Public Policy Objectives – The public policy objectives for Payments Canada are to promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interest of users (defined by Department of Finance)

Payment Systems Directive, issued by the European Commission

An entity (typically a public or government entity) with authority to define policy and supervise a particular business activity through the making and enforcement of standards and rules.

Retail payments are mainly consumer payments of relatively low value and urgency.

A routing number identifies the financial institution and the branch to which a payment item is directed. Along with the account number, it is essential for delivering payments through the clearing system. In Canada, there are two formats for routing numbers: one for electronic payment items and one for paper payment items.

A settlement system which couples final and irrevocable transactions with a DNS process, to emulate an RTGS experience for users.  As a DNS system settlement is delayed to allow for netting of transactions across participants.

Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro.

An account which is established and maintained by each direct clearer, at the Bank of Canada, or by each indirect clearer with its clearing agent(s), for the purpose of settlement.

An item dated more than six (6) months prior to presentment for payment.

An entity that controls the functioning of a system including its operating rules, policies and infrastructure. The entity may perform some or all of the functions or rely on a third party to perform some functions. 

A disruption to the payments ecosystem that has a material impact on ecosystem service providers or end users as a group.

The failure of the payments ecosystem to ultimately settle on the books of the central bank.

A paper debit resembling a cheque that is not created or signed by the payor, but is drawn by a third party on behalf of the payor, purportedly with the payor's authorization given over the telephone or by other remote means.

The speed with which funds are initiated, processed,  posted and made available to the recipient

A three-digit financial institution number together with a five-digit branch number assigned by that institution.