Canada has joined a growing number of nations seeking to adopt the International Standards Organization 20022 payment messaging standard to initiate faster payments at less cost.

The Canadian Payments Association has issued a report that estimates the country's businesses could save as much as $4.5 billion over five years by adopting ISO 20022 and eliminating paper checks as part of the process.

Canada is undergoing a multi-year process to modernize the country's core payments infrastructure, similar to what the Federal Reserve Banks in the U.S. have initiated.

For more than a year, the Federal Reserve Banks have rallied the nation's banks and businesses around the premise that the ISO 20022 standard is a vital component to enabling real-time electronic payments domestically and globally.

The ISO 20022 standard allows the inclusion of remittance documents with cash, card, securities, trade or FX international payments in a language that all domestic and global financial institutions would share.

Three months ago, the Payments U.K. council published its first draft of ISO 20022, calling it an important step in making it a globally interoperable standard for real-time payments.

In its report, the Canadian Payments Association says adoption of ISO 20022 lowers the cost of electronic payments and sets the stage for eliminating checks. In 2014, the report states, businesses wrote nearly 1 billion checks in Canada, and many still do because of the information that can be sent along with a check but not with most electronic payment systems.

Once implemented, the ISO 20022 standard would allow far more information to travel with electronic payments, which will enable "greater automation and improved efficiency for businesses and financial institutions alike," the report stated.

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