February 2006

ACSS STREAMS:
AN OVERVIEW OF THE TYPES OF PAYMENTS
CLEARED THROUGH THE AUTOMATED
CLEARING SETTLEMENT SYSTEM (ACSS)

PAPER-BASED PAYMENT ITEMS

Small Paper Items

   paper-initiated payment items valued at less than $50,000

   mostly cheques, but these also include items such as travellers' cheques, gift certificates and money orders

   small paper items account for approximately 30% of the total annual volume of items passing through the ACSS (based on 2001 data)

Large Paper Items

   paper-initiated payment items valued at $50,000 or more

  large value paper items make up about 0.15% of the volume of items cleared but account for 60% of the total value of transactions (based on 2001 data)

Unqualified

    paper payment items valued at less than $50,000 which are not encoded with Magnetic Ink Character Recognition (MICR)

    these include unencoded items such as counter cheques, as well as mutilated items which cannot be processed in an automated fashion

Computer Rejects

   MICR-encoded paper items with individual values of less than $50,000 rejected when passing through reader/sorters

    a MICR encoded cheque will be rejected, for example, if there is a flaw or tear in the MICR line, or a pen stroke through it

Paper-Based Remittances

    paper bill payments MICR-encoded with a Corporate Creditor Identification Number (CCIN), for credit to a corporate entity

    generally initiated via an Automated Banking Machine or in branch

    added to the ACSS in September 1996 upon implementation of CPA Rule H6

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ELECTRONIC PAYMENT ITEMS

AFT Debits

   pre-authorized debits most commonly used for mortgage and other bill payments, as well as funds transfer and corporate cash management payments

    formerly called "Magnetic Tape Debits"; files are now exchanged via data transmission

AFT Credits

    direct deposit items

    formerly called "Magnetic Tape Credits"; files are now exchanged via data transmission

Shared Network

point of service disbursement of currency on shared networks such as Interac and the Plus System

Point of Service Debits

debits initiated at the point of service for goods or services

Point of Service Credits

credits initiated at the point of service for refund of goods or services

Online Payments (Debits)

payments initiated by a customer online for the purchase of goods or services, in accordance with CPA Rule E2, that result in a debit to the customer's bank account

Online Payment Refunds (Credits)

payments initiated by a merchant or biller online, in accordance with CPA Rule E2, which result in a credit to the customer's bank account to reflect a refund

EDI

corporate-to-corporate credits carried out via electronic data interchange

Electronic (EDI) Remittances

bill payments that include data related to a Corporate Creditor Identification Number, for credit to a corporate entity

includes bill payments initiated via telephone and Internet banking

may include some paper-based bill payments remittances converted to EDT by FIs

added to the ACSS in September 1996 upon implementation of CPA Rule H6

ABM Adjustments

ABM adjustments to correct errors from Shared ABM Network Transactions

 

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DISCONTINUED STREAMS:

Tape Clearings

    paper items recorded and exchanged on tape during a pilot project in Quebec City

    this practice was discontinued with the 1992 closing of the Quebec City Regional Settlement Point

Returns

    paper items with individual values of less than $50,000 rejected when passing through reader/sorters

    stream has been discontinued and these items are now classed as computer rejects

Government Stream

  This stream was discontinued in 1998

    Government of Canada paper instruments (including Receiver General Warrants, Canada Savings Bonds, etc.) and Government of Canada direct deposit payments

    although the entire value of Government of Canada paper instruments and direct deposit payments are reflected in this stream, only the volume of Receiver General Warrants is reflected – the volume of direct deposit payments is reflected in the Magnetic Tape Credits stream

Notes:

1. For all payment types mentioned, figures include only those items which are exchanged between directly clearing financial institutions through the ACSS. With respect to paper items for example, a cheque drawn on one financial institution, and deposited to a different account within that same institution, i.e., an on-us item, does not require settlement and therefore does not pass through the clearings.

2. These statistics are accumulated through the ACSS reporting system. The Direct Clearers are responsible for entering the volumes and values of payment items into their categories.

3. The 1995 figures show a substantial reduction in the total value of items cleared. The CPA believes that this is attributable to the implementation, in 1995, of the Debt Clearing Service (DCS) by the Canadian Depository for Securities and Multinet (foreign exchange netting mechanism), the effects of which are clearly visible in the large paper stream.