Resources

 

FAQ

About the Task Force

What is the mandate of the Task Force?

The task force will:

  • Identify public policy objectives to be pursued in the operation and regulation of the payments system;
  • Identify and assess the regulatory and institutional structures best suited to achieving these public policy objectives;
  • Assess and report on the safety and soundness of the Canadian payments system;
  • Assess the competitive landscape by identifying any potential barriers for new entrants and mechanisms to improve the competitive landscape of the domestic payments system;
  • Assess the degree of innovation in the domestic payments system and report on the challenges and opportunities to bring new and innovative products to market in Canada; and
  • Assess and report on whether consumers and merchants are well served by the domestic payments system.

How long will the Task Force operate?

The task force will complete its work and make its final recommendations to the Minister of Finance by the end of 2011.

Why an independent Task Force?

The Task Force model was chosen to leverage the participation of a number of experts, with diverse backgrounds and experience. In addition, this Task Force will be independent, allowing it to be free from restrictions sometimes imposed by government, and unrestrained in its final recommendations to the Minister of Finance.

Who are the other Task Force Members?

Please see the task force members’ biographical notes for more information.

What kind of recommendations will the Task Force make? Will they be legislative? Policy-based?

The task force has been given a broad mandate to evaluate the current payments system environment. The task force aims to provide concrete, practical advice and recommendations to help guide the evolution of the payments system in Canada. It is too soon to anticipate what the final recommendations might be.

About the Payments System

What is the Canadian Payment System and why does it matter?

The payments system refers to arrangements that allow consumers, businesses and other organizations to transfer value from one party to another. The payments system includes the institutions, instruments and services that support the transfer of value between parties in a transaction.

The Canadian economy requires a safe and efficient payments system for day-to-day business and transactions in the financial sector.

What institutions make up the Canadian payment system?

The Canadian payments system includes a broad range of participants, who offer payment services ranging from traditional methods (paper cheques) to new and innovative approaches such as mobile payments. The participants include:

  • Financial institutions;
  • Debit and credit card networks;
  • Merchant acquirers—a service that gives merchants the ability to accept payments from customers on credit or debit card, and handles the transmission of funds on their behalf; and
  • Paper and electronic payment processors.

What are the instruments and services that make up the Canadian payment system?

The instruments in the payments system include cash, cheques, debit and credit cards, gift cards and cash cards. The services include:

  • Automated funds transfer
  • Electronic data interchange
  • Point of service
  • Electronic bill payments
  • Automated teller machines and cashback at point of service
  • Money service companies, including money transfers, cheque cashing, payday lending, and commercial and retail foreign exchange
  • Loyalty or rewards programs
  • Business-to-business payments

Why are you reviewing the payments system now? Is the system broken?

In the last 20 years, new service providers and significant technological advances have dramatically altered the payments landscape in Canada. Some of these emerging service providers operate in new and different ways that may fall outside of laws intended to protect Canadians.

To ensure that the system remains flexible to accommodate evolving technology and innovation, a review of the existing rules is timely.

What is the role of Government in the current system?

The Bank of Canada and the Department of Finance Canada both have important regulatory responsibilities for the payments system. Along with the Canadian Payments Association (CPA), each plays a distinct role in its operation.

The Bank of Canada oversees payments and other clearing and settlement systems as part of its regulatory responsibilities under the Payment Clearing and Settlement Act. This allows financial institutions to engage in large transactions safely and efficiently.

About the Papers

What is the purpose of The Way We Pay?

This discussion paper is intended to provoke dialogue amongst stakeholders and Canadians about the future of the payments system. The paper takes into account all that we have learned in the last several months, and details our preliminary thinking on how best to guide the evolution of payments in the future.

Why are you putting two papers out? Can I respond to both?

The Way We Pay reflects the views of the Task Force, taking into account all that we have learned in the last several months. As such, it has been designed to solicit views in direct response to its contents.

The second document – Scenarios for the Future of the Payments System – is the result of a collaborative research project which the Task Force participated in over a period of several months. With the help of Viewpoint Learning (an organization that specializes in designing and conducting dialogues for business and public policy purposes), we convened a broad range of payments industry leaders and stakeholders who hold different perspectives.

This group of about 40 participants then worked together to develop four alternative scenarios for the future of the payments system in Canada. So that all Canadians can benefit from this work, and the options presented by this coalition of stakeholders, the report is being made available for reference and comment.

Participants wishing to respond to both papers, or one in isolation, are welcome to do so.