How Canada’s Evolving Payment Landscape Will Impact Lenders

Abstract: Canada’s payment systems are undergoing major modernization to meet the evolving needs of consumers and businesses. Two key developments—adoption of the ISO 20022 global payment messaging standard and updates to bill payment processing rules—are set to bring significant benefits to lenders. These changes will improve data quality, reduce processing errors, enhance risk management, and create more seamless customer experiences. As the payments landscape transforms, lenders will be better equipped to operate efficiently and support innovation across the financial ecosystem.

As the needs and behaviours of Canadians shift, so too does the way they pay and get paid. To meet these evolving demands, Canada’s payment systems are undergoing a transformation. Payments Canada is working closely with industry stakeholders to modernize our national payment infrastructure to ensure global competitiveness.

Two key initiatives that will bring significant benefits to lenders are:

1. The adoption of the ISO 20022 payment messaging standard
2. Enhancements to the bill payment framework

A Global Standard for Payment Messaging

ISO 20022 is a standardized messaging format designed to streamline and enhance global business payments. As the foundation for payment messaging, it offers consistent, rich, and structured data. Payments Canada manages the standard’s Canadian usage guidelines and is supporting its multi-year implementation across the ecosystem.

For lenders, the adoption of ISO 20022 is particularly valuable. It delivers:

• Higher-quality data and insight across the payment chain
• Reduced manual errors, improving loan processing and management
• Enhanced risk management through greater transaction transparency
• Improved customer experience with real-time updates and streamlined repayment options

By providing standardized, detailed information, ISO 20022 empowers lenders to identify potential issues quickly, reduce friction in client interactions, and build more efficient processes.

Advancing Bill Payment Processing

From cellphone bills to property taxes, Canadians initiate billions of payments annually between financial institutions. These payments are tracked and reconciled through Payments Canada’s Automated Clearing Settlement System (ACSS). In 2023 alone, 9.8 billion payments were processed through the ACSS—many of which were bill payments.

Rule H6 governs how these bill payments are processed by financial institutions within the ACSS. In 2023, Payments Canada conducted a public consultation on proposed updates to Rule H6. These changes aim to:

• Improve operational efficiency
• Enable technological advancement
• Enhance the bill payment experience for consumers, businesses, and financial institutions—including lenders

Driving Innovation Forward

The adoption of ISO 20022 and improvements to bill payment processing represent just a portion of the modernization underway. These initiatives are part of a broader strategy to deliver secure, efficient, and modern payment options that meet the evolving needs of Canadians and support business innovation.

To learn more about how payment modernization can streamline your operations, join me at The Payments Canada SUMMIT, Canada’s premier payments event, taking place in Toronto from May 6 to 8, 2025.

To save $100 on your registration, use my promo code: SUMM25PCVIP

Sign up for the CLA 2025 Summit Series