Thank you very much.
Good afternoon.
The Canadian Payments Association, as you know, is Canada's main financial market infrastructure. We design and operate Canada's national clearing and settlement systems for payments. While the CPA is a little-known commodity to most Canadians, it plays an essential role in their financial lives and in the day-to-day operations of financial institutions and businesses across the country.
The CPA systems ensure that payments between financial institutions, which represent the aggregation of payments made by Canadians and businesses and governments, are safely and securely completed each and every day. The value transferred across our systems each day is over $170 billion.
We're guided by the public policy objectives of safety, soundness, efficiency, and the interests of users. These objectives are enshrined in the legislation. Financial institutions that are engaged in the business of payments are required to be members of the Canadian Payments Association and they fund our operations. We're overseen by the Bank of Canada because of our importance to the stability of the overall financial system.
We do not operate at the retail end of the payments chain where the emerging digital payment technologies are conceived. Our focus is at the macro level and is concerned with ensuring that the financial claims between financial institutions can be settled efficiently and without risk. That's very important. However, in consultation with members and stakeholders we maintain a robust set of rules and standards that facilitate the deployment of emerging payment products and services, and existing payment products and services.
Obviously the national payment infrastructure needs to be responsive to the changing environment and the needs of users. If you'd permit me I'd like to offer a perspective of some of the trends from our vantage point. Like this committee, the CPA has been taking a hard look at the evolving payments environment. It is changing rapidly, creating both challenges and opportunities for industry, regulators, policy-makers, and of course the end user.
There are a number of emerging and important trends that certainly inform our view of the future and our direction. The emergence of online and mobile payments is a relatively recent phenomenon, although we're all talking about it a lot, and as such it represents a very small share today of overall payment volumes and value at the aggregate level. That said, the growth is there and certainly is expected. Most of consumer spending, as you know, is done using non-cash methods and consumers rely almost completely on electronic payment options at point of sale.
As an active global player, Canada is contributing to the harmonization of international payment standards. This is important because global standards for payment processing and payment messages will over time enhance Canada’s global interoperability and help better meet the needs of Canadian businesses for data to accompany a payment. Increasingly governments and central banks are becoming much more active in the payments ecosystem around the world as they seek to ensure greater levels of efficiency, safety, soundness, and the satisfaction of end-user needs.
Clearly payment methods are increasingly complex and they can create risk exposures for participants and users. Today we see, for example, new non-traditional and unregulated players in the payments space. We see the demands for faster payment processing, faster settlement and funds availability, and new delivery mechanisms, such as the mobile phone. All of these need to be carefully considered.
I'd highlight four interesting challenges for Canada, again from our vantage point: consistent and comprehensive user protection, understanding and managing risks, concerns with security and cyber-risk, and ensuring continued innovation in payments.
The digital revolution is transforming almost all industries and businesses today. These transformations have brought about significant efficiencies and capabilities. However, they introduce new challenges for policy-makers, regulators, and the industry.
As the payments industry undergoes this transformation, there will be an increased reliance on industry collaboration and coordination. By working together, we can ensure that the public policy objectives underpinning the Canadian payments system are respected.
Thank you.