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2172 Results

2025 Methods-of-Payment Survey Report: Cash in an Increasingly Digital and Mobile Economy

Staff analytical paper 2026-36 Marie-Hélène Felt, Saika Pacouloute, Angelika Welte
The 2025 Methods-of-Payment Survey provides insights into how Canadians pay for their day-to-day purchases and how they use cash (i.e. banknotes and coins). While contactless card payments dominate in-person transactions, most Canadians maintain favourable views on cash and still hold and use it. They are also increasingly adopting mobile payments.
Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E4, E41 Research Theme(s): Money and payments, Cash and bank notes, Retail payments

Quantifying the Economic Benefits of Payments Modernization: the Case of the Large-Value Payment System

Staff working paper 2021-64 Neville Arjani, Fuchun Li, Zhentong Lu
Canada is undertaking a major initiative to modernize its payments ecosystem. The modernized ecosystem is expected to bring significant benefits to Canadian financial markets and the overall economy. We develop an empirical framework to quantify the economic benefits of modernizing the payment system in Canada.
November 21, 2003

Developments, Issues, and Initiatives in Retail Payments

Innovations in basic information technologies, in payment applications, and in the availability of global markets, as well as substantial changes in financial sector policy, have fundamentally changed how the retail payments system in Canada operates. Principally, the volume and types of electronic payments have grown, and there is increased participation by diverse groups of financial and non-financial institutions as providers of retail payment services. The resulting policy problem for payment systems is how best to benefit from efficiency gains while managing payment risks. O'Connor examines the effect of the technological and legislative changes and the initiatives developed by the public and private sectors in such areas as the market arrangements for services; customer risks and costs for settling large-value retail payments; the security of payment information and the efficiency with which it is transmitted; and the effects of differing regulatory regimes on competition among providers of retail payment services.

MSTest: An R-Package for Testing Markov Switching Models

Staff working paper 2026-7 Gabriel Rodriguez Rondon, Jean-Marie Dufour
We present the R package MSTest, which implements hypothesis testing procedures to determine the number of regimes in Markov switching models. The package provides several testing frameworks, including Monte Carlo likelihood ratio tests, moment-based tests, parameter stability tests, and classical likelihood ratio procedures.
June 8, 2017

Using Market-Based Indicators to Assess Banking System Resilience

This report reviews the use of quantitative tools to gauge market participants’ assessment of banking system resilience. These measures complement traditional balance-sheet metrics and suggest that markets consider large Canadian banks to be better placed to weather adverse shocks than banks in other advanced economies. Compared with regulatory capital ratios, however, the measures suggest less improvement in banking system resilience since the pre-crisis period.
Content Type(s): Publications, Financial System Review articles JEL Code(s): G, G0, G01, G1, G10, G2, G21

Understanding Trend Inflation Through the Lens of the Goods and Services Sectors

Staff working paper 2020-45 Yunjong Eo, Luis Uzeda, Benjamin Wong
The goods and services sectors have experienced considerably different dynamics over the past three decades. Our goal in this paper is to understand how such contrasting behaviors at the sectoral level affect the aggregate level of trend inflation dynamics.

Public vs. Private Payment Platforms: Market Impacts and Optimal Policy

Staff working paper 2026-10 Youming Liu, Francisco Rivadeneyra, Edona Reshidi
We study the competition between a welfare-maximizing public payment platform (e.g., CBDC or fast payment system) and a profit-maximizing private platform in a two-sided market, deriving optimal public pricing and showing how network effects, fragmentation, and policy mandates like zero fees or cost recovery shape welfare, usage, and fee incidence.

Inflation, Output, and Welfare in the Laboratory

Staff working paper 2023-11 Janet Hua Jiang, Daniela Puzzello, Cathy Zhang
We investigate the effect of inflation on output and welfare in the laboratory. Consistent with monetary theory, we find that inflation acts as a tax on monetary exchange and reduces output and welfare.

A central bank digital currency for offline payments

Offline functionality is a key consideration for a potential CBDC. We describe the different types of offline functionality based on their duration outside of network connection—either intermittent (for short periods) or extended (for longer periods). We discuss the advantages and drawbacks of each and consider implications for end-user devices, system resilience and universal accessibility.
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