Payments Canada is seeking input on proposed changes to how bill payment remittances are processed through the Automated Clearing Settlement System (ACSS).
This includes the potential impact the changes “could have on billers, consumers who make bill payments and any financial institution or organization that provides bill payment-related services.”
Potential impacts may include those “to operational processes, costs, data protection or recourse.”
The proposed changes primarily apply “to Rule H6, which provides the framework for processing bill payment remittances through the ACSS.”
The changes were developed in close collaboration with Payments Canada’s Bill Payment Framework Review Working Group, which “includes representatives from member financial institutions and Payments Canada’s Stakeholder Advisory Council.”
The aim of the proposed changes is “to improve operational efficiency, the ability to embrace technological advancements in an evolving marketplace and the bill payment experience for all impacted groups.”
Payments Canada said they invite “all interested parties to contribute to the consultation process by providing feedback and comments before May 5, 2024, to consultation@payments.ca.”
The framework for processing bill payment Remittances (the “framework”) through Payments Canada’s ACSS is found in Payments Canada’s Rule H6 — Rules Pertaining to the Inter Financial-Institution Exchange of Bill Payment Remittances for the Purpose of Clearing and Settlement. Rule H6 outlines the procedures for the exchange “for the purpose of clearing and settlement of paper-based and electronic bill payment Remittances.”
A limitation of the current framework is “that it only applies to bill payments that are made to a biller that has obtained a Corporate Creditor Identification Number (CCIN). Bill payments made to a biller that does not have a CCIN are typically exchanged as Automated Funds Transfer (AFT) Credit Transactions and are not governed by Rule H6. AFT Credit Transactions are processed in accordance with Payments Canada’s Rule F1 — Rules Applicable to Automated Funds Transfer (AFT) Transactions. As a result, different rules apply to bill payments cleared via the ACSS depending on whether the payee is a biller that has obtained a CCIN; this has created gaps whereby similar payments are not treated the same.”
A number of opportunities for improvement to the current bill payment framework have been identified, “prompting a review of the framework to ensure it meets the evolving needs of consumers, businesses and FIs. A working group, including representatives from Payments Canada’s member FIs and its Stakeholder Advisory Council, was established in April 2023 to review identified operational issues and conduct a thorough analysis of the various options for consideration to address them (the “Working Group”).”
The purpose of this consultation paper is to “obtain further member and stakeholder input on the proposed changes to Payments Canada’s bill payment framework.”
Payments Canada consulted with members (i.e., the Senior Operational Committee and Member Advisory Council) and the Stakeholder Advisory Council “to identify current operational issues pertaining to Bill Payment Remittance Processing, and referenced Payments Canada’s records on previous bill payment framework-related challenges and suggestions for revision.”
In April 2023, the Working Group commenced its review of this feedback, and “began identifying which challenges were within Payments Canada’s scope to address.”
This was followed by a thorough analysis of “the issues and consideration of various options to address the identified challenges. This review led to a number of proposed changes, which are outlined in Part 2 of this consultation document.”
Overall guiding principles and objectives for the bill payment framework review:
- Enhance usability and benefits of electronic bill payments cleared via the ACSS for all billers and consumers;
- Increase transparency and clarity of the rules applicable to electronic bill payments cleared via the ACSS;
- Improve operational efficiency;
- Embrace technological advancements and evolving marketplace; and
Take into account the interest of the various stakeholders in the bill payment process.
The proposed changes will be launched in multiple phases “based on the complexity for FIs and stakeholders to implement, with the first set of changes anticipated to become effective in the first half of 2025 and the remaining changes coming into effect at dates to be determined in consultation with impacted FIs and stakeholders to align with their operational and technological capabilities.”
The objective of this consultation is to obtain feedback from the following groups to better understand the impact of the proposed changes:
- Consumers and consumer groups: payors that make bill payments online or in person at their bank branch.
- Members: FIs that offer a bill payment service to their business clients or participate in bill payment processing.
- Billers: payees that receive bill payments from their customers through their FI’s bill payment service.
- Third-party providers: any organization that provides a service that supports bill payment processing, such as payment service providers.