Public Policy Objectives and the Next Generation of CPA Systems: An Analytical Framework

James Chapman, Jonathan Chiu, Sajjad Jafri and Hector Perez Saiz ()

Discussion Papers from Bank of Canada

Abstract: The payments landscape in Canada is rapidly changing and will continue to evolve, fuelled by strong and persistent drivers. In Canada, the Canadian Payments Association (CPA) is on a path to modernize Canada’s core payment systems. This paper contributes to the discussion in three ways. First, it translates the government’s public policy objectives (PPOs) for the broad payments ecosystem into desired outcomes for CPA payment systems. Second, it develops a taxonomy for clearly describing the defining attributes of a payment system. These defining attributes are access, functionality, interoperability, timeliness of payments and risk management. Finally, we develop an analytic framework to consider the trade-offs of the various attributes to achieve the PPOs for the Canadian payments ecosystem. A key output of these contributions includes a possibilities frontier that represents the set of systems with designs that best achieve the PPOs, subject to regulatory and technological constraints. Based on the results of this exercise, we recommend the most critical issues for the CPA to investigate as it considers the modernization of its systems.

Keywords: Economic models; Financial services; Financial system regulation and policies; Payment clearing and settlement systems (search for similar items in EconPapers)
JEL-codes: E42 L14 L15 L52 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:15-6

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