Financial institutions collaborate with industry stakeholders to assure consistent treatment of wire payments
OTTAWA-- Following collaboration with business and corporate stakeholders, Canada’s financial institutions, led by the Canadian Payments Association (CPA) and the Canadian Bankers Association (CBA), have endorsed a best practice for the treatment of wire payments for their customers.
The Best Practice for the Uniform Treatment of Wire Payments will provide assurance for customers of endorsing financial institutions that their wire payments will be treated in a manner that is consistent with the rules created for the CPA’s Large Value Transfer System (LVTS). Although applicable to any wire payment in Canada, this best practice is especially relevant to large corporate clients who routinely make large value wire payments.
Wire payments between financial institutions within Canada are generally processed through the LVTS, which enables the sending of real-time, irrevocable payments. However, payments made between customers of the same financial institution, known as “on-us payments”, are not processed through the LVTS and, therefore, not subject to its rules.
This best practice will provide assurance to customers of a financial institution that on-us wire payments will be treated in a manner similar to LVTS payments (from the customers’ perspective), meaning, for example, the payment is credited the same day and should not be reversed.
The CPA and the CBA have partnered to advance this best practice among their respective members.
“Businesses and large corporate clients were able to share their concerns about on-us payments through the CPA’s Stakeholder Advisory Council,” said Ken Casey, Interim President and CEO of the CPA which operates Canada’s national clearing and settlement infrastructure. “Although on-us payments are not governed by the CPA, given the relevance of this issue to our member financial institutions and its importance to stakeholders, we agreed to broker industry dialogue on the issue to facilitate a solution in the public interest.”
“Virtually all on-us payments are processed without any problems, but this voluntary initiative gives bank customers the assurance that their wire payments will be treated consistently, whether they are on-us payments or not,” said Terry Campbell, President of the CBA, which provides its members with information, research and operational support, and contributes to the development of public policy on issues that affect financial institutions. “Collaboration in the financial sector continues to be a key strength in our ability to serve Canadian consumers and businesses.”
“While persistent in raising their concerns about these types of wire payments, CPA stakeholders were able to work cooperatively with financial institutions to bring about this accomplishment for the payments sector,” said Ron Matthews, Chair of the CPA’s Stakeholder Advisory Council.
The Best Practice for the Uniform Treatment of Wire Payments is available on both the CPA (www.cdnpay.ca) and CBA (www.cba.ca) websites.