Clearing and Settlement Systems from Around the World: A Qualitative Analysis

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As Canada continues to engage in a dialogue to develop the approach to modernizing its core payment systems, we analyze the core payment systems that exist in countries around the world. We study payment systems in 27 jurisdictions, encompassing a broad range of geographic regions, through three levels of analysis. First, we identify and discuss the different types of core systems, and the prevalence of each of them. At a high level, we find that most jurisdictions have added a new real-time retail system, all have a batch retail payment system, and the vast majority have made upgrades to their large-value payment systems. Second, we evaluate what core system upgrades have resulted in improved access, functionality, interoperability, timeliness and risk management. Finally, we analyze the overarching design found in multiple core payment systems across jurisdictions and identify four distinct core payment system configurations. These main core system configurations reflect the different approaches taken to modernize, depending on jurisdictional factors, including public policy objectives, drivers, needs, payment instruments and gaps resulting from legacy systems. We conclude that it is necessary to have a complete understanding of modernization objectives, based on each country’s unique jurisdictional factors. A comprehensive set of modernization objectives can then be used to develop a holistic multi-system plan, designed to modernize each core payment system in a complementary manner.