Canadian Payments Association - Clearing and Settlement Systems

Clearing and Settlement Systems

Clearing and settlement systems are essential to the smooth functioning of the economy. These systems allow financial institutions to calculate how much is owed to each other as a result of their customer's transactions and to transfer those funds to settle those balances.

The CPA operates three main clearing and settlement systems:

  1. The Large Value Transfer System (LVTS) is Canada's primary system for clearing and settling large value, time critical Canadian dollar transactions. It provides participants and their customers with the certainty that, once a payment has passed the system's risk-control tests, the transactions are final and will settle on the books of the Bank of Canada the same day.
  2. The Automated Clearing Settlement System (ACSS) is a system through which Canadian dollar cheques and electronic payment items, such as direct deposits, ATM withdrawals, point of sale transactions, online payments and pre-authorized debit and bill payments are cleared and settled. The system tracks the exchange of payment items and the resulting balances due to and from direct participants.
  3. The CPA also operates the U.S. Dollar Bulk Exchange (USBE), a parallel system to the ACSS used for payment items in US dollars in Canada.

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