Large Value Transfer System (LVTS)

What is ‘Large Value Transfer System – LVTS’

An electronic wire payment system in Canada, facilitating the transfer of funds between large financial institutions, including the central Bank of Canada.

Explaining ‘Large Value Transfer System – LVTS’

LVTS transactions can be performed for banks or their clients. These transactions are instant, which improves the quickness and efficiency of business transactions. Once the transaction is sent through the system, it can not be reversed. This prevents insufficient funds, stop payments and fraud.

For example, because financial institutions borrow and lend money to each other, at the end of the day some firms have a shortage of money, while other firms have an excess amount. They use the LVTS to close out these short and long positions.

Large Value Transfer System (lvts) FAQ

What does Lvts stand for?

It stands for Large Value Transfer System.

What is a high value payment?

High-Value Payments is an enterprise payments infrastructure helping financial institutions to consolidate and streamline payments processing, increase straight-through processing (STP) and reduce operational costs.

Which are real time large value payments?

The large value transfer system (LVTS) is an electronic wire payment system in Canada that facilitates transfer of funds between large financial institutions, including the central Bank of Canada. It is a real-time gross settlement (RTGS) equivalent. The payments are practically instantaneous.

What is retail payment system?

Retail payments involve transactions between two consumers, between consumers and businesses, or between two businesses. These retail payments may use various retail payment instruments or access devices (e.g., checks, ACH, card, phones, etc.).

Does Canada use ACH?

Electronic Funds Transfer (EFT), Canada’s version of ACH, currently lacks data and transparency into addenda records compared to the U.S. systems. The amount of characters that can be passed along with each payment in Canada is restricted.

What is a settlement account in banking?

A settlement account allows a financial entity to perform any financial operations such as the transfer of funds from the account, receiving funds to the account and servicing credits.

Further Reading

  • The LVTS-Canada's large-value transfer system – [PDF]
  • Network analysis and Canada's large value transfer system – [PDF]
  • Which Bank is the'Central'Bank? An Application of Markov Theory to the Canadian Large Value Transfer System – [PDF]
  • Estimating the demand for settlement balances in the Canadian Large Value Transfer System – [PDF]
  • Examining Full Collateral Coverage in Canada's Large Value Transfer System – [PDF]
  • Global trends in large-value payments – [PDF]
  • A System with Zero Reserves and with Clearing Outside of the Central Bank: The Canadian Case – [PDF]