The Canadian Payments Association (CPA) is eyeing big savings for businesses by switching to the ISO 20022 payments messaging standard. Reports by Finextra this week said CPA anticipates that up to $3.4 billion in cost cuts can benefit businesses over the next five years, a direct effect of eliminating the paper check.
According to reports, the estimates were announced as CPA is launching an effort to digitize the nation’s payment structure, a move reports said will mean a gradual shift to ISO 20022. The group outlined its migration plans in a paper, which included points as to how this shift will help eliminate paper checks for B2B payments and take advantage of more affordable electronic payments.
[bctt tweet=”Canada launches an effort to gradually shift to ISO 20022.”]
But, according to CPA, the shift won’t come on its own.
“Modernization of the Canadian payment system will require material investment by financial institutions,” said CPA Vice President of Research Carol Ann Northcott. “Therefore, it is critical we understand the prospective benefits for all users of the Canadian payment system.”
Reports said that in Canada alone nearly 1 billion checks were written last year; businesses are still a common user of the payment method for a variety of reasons, most notably because they can include additional information about the payment, such as invoice data or purchase orders.
But the ISO 20022 payment messaging standard can also include this type of information, CPA said, and lead to faster, more efficient payments and automated data capture. Businesses will be able to benefit most from this ability, the association said.
Northcott also said that additional benefits to the payments messaging standard could mean the support of payments innovators and more efficient cross-border transactions.
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