Payments Canada announced the launch of the second release of Lynx, Canada's high-value payment system. This follows the successful launch of Lynx in August 2021, replacing the Large Value Transfer System (LVTS) that served as Canada's high-value payment system for over 20 years.
The second release of Lynx introduces the ISO 20022 financial messaging standard which allows richer data to travel with each payment. As more financial institutions begin to send and receive ISO-enabled payments, Lynx participants will be able to leverage richer payments data to offer new products and services to their customers. For example, additional data such as purchase order details and invoice reference numbers traveling with each payment will allow for increased automation and the digitization of manual and paper-based processes currently required to support payment reconciliation and exception handling. The implementation of the ISO 20022 standard will also simplify cross-border payments as the standard is adopted around the world, and helps align Canadian financial institutions with Swift's global implementation of ISO 20022.
"The introduction of ISO 20022 messaging on the Lynx payment system represents a massive collaborative effort between Payments Canada, our member participants, the Bank of Canada and our technology partners IBM and Nexi," said Tracey Black, President and CEO at Payments Canada. "Payments Canada is proud to bring the benefits of ISO 20022 to Canadians through Lynx at the same time as the global payment community. ISO 20022 is an integral part of our broader payment Modernization initiative and provides a foundation for continued payment innovation in Canada."
About Lynx
A fundamental part of Payments Canada's Modernization initiative was the introduction of a new high-value payment system to support the long-term growth of Canada's economy and payment needs. Lynx facilitates the irrevocable transfer of wire payments between participating financial institutions in Canadian dollars. Lynx is based on the real-time gross settlement (RTGS) model, in which settlement occurs immediately after the clearing of each individual payment resulting in the instant transfer of funds in central bank money from one participant to another. Settlement finality reduces risk for participants and the Bank of Canada, and supports the safety and soundness of Canada's financial system.
Lynx is designated by the Bank of Canada as a systemically important payment system under the Payment Clearing and Settlement Act. Lynx is critical to Canada's economy as it processes payments valued at hundreds of billions of dollars every business day. The Lynx high-value payment system will continue to support innovation, enhanced cyber security and resiliency capabilities. Lynx serves as the key mechanism by which the Bank of Canada implements monetary policy.
The successful launch of release one of Lynx included the implementation of a new risk model that complies with Canadian and international risk standards and new technology (application and infrastructure). In the first year of operations, Lynx has cleared and settled over 12 million payments valued at approximately $115 trillion. Lynx is owned and operated by Payments Canada and overseen by the Bank of Canada. It is used to send and receive high-value payments by the following participants and their customers:
• ATB Financial
• Bank of America
• Bank of Canada
• Bank of Montreal (BMO)
• Bank of Nova Scotia (BNS)
• BNP Paribas (Canada)
• Canadian Imperial Bank of Commerce (CIBC)
• Central 1 Credit Union
• Citi
• Fédération des caisses Desjardins du Québec (FCDQ)
• HSBC Bank Canada
• ICICI Bank Canada
• Laurentian Bank of Canada (LBC)
• National Bank of Canada (NBC/BNC)
• Royal Bank of Canada (RBC)
• State Street
• Toronto-Dominion Bank (TD)
