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Predicting Payment Migration in Canada


  • Anneke Kosse
  • Zhentong Lu
  • Gabriel Xerri


Canada currently has two core payment systems for processing funds transfers between financial institutions: the Large Value Transfer System (LVTS) and the Automated Clearing Settlement System (ACSS). These systems will be replaced over the next years by three new systems: Lynx, the Settlement Optimization Engine (SOE) and the Real-Time Rail (RTR). We employ historical LVTS and ACSS data to predict the demand for the future systems. The results show that small-value LVTS payments will likely migrate to SOE. Also, in the short run, about CAD 10,000 billion of LVTS and ACSS payments (per year) is anticipated to migrate to the RTR if not subject to maximum transaction values. These migration patterns raise important policy questions, such as whether the future systems should be subject to value caps and/or higher collateral requirements.

Suggested Citation

  • Anneke Kosse & Zhentong Lu & Gabriel Xerri, 2020. "Predicting Payment Migration in Canada," Staff Working Papers 20-37, Bank of Canada.
  • Handle: RePEc:bca:bocawp:20-37

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    References listed on IDEAS

    1. Anneke Kosse & Zhentong Lu & Gabriel Xerri, 2020. "An Economic Perspective on Payments Migration," Staff Working Papers 20-24, Bank of Canada.
    2. Francisco Rivadeneyra & Nellie Zhang, 2020. "Liquidity Usage and Payment Delay Estimates of the New Canadian High Value Payments System," Discussion Papers 2020-9, Bank of Canada.
    3. Kim Huynh & Gradon Nicholls & Oleksandr Shcherbakov, 2019. "Explaining the Interplay Between Merchant Acceptance and Consumer Adoption in Two-Sided Markets for Payment Methods," Staff Working Papers 19-32, Bank of Canada.
    4. Kosse, A., 2014. "Consumer payment choices : Room for further digisation?," Other publications TiSEM 7486cb21-13a2-4609-bad6-e, Tilburg University, School of Economics and Management.
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    More about this item


    Financial institutions; Financial services; Financial stability; Financial system regulation and policies; Payment clearing and settlement systems;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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