Payments Canada has announced a new system to speed up the payments and transfer process in Canada. Real-Time Rail (RTR) seeks to enable 24/7/365 value transfer in real-time.
Payments Canada is a “public purpose organization” that operates the Canadian payments system. In 2023, Payments Canada reportedly cleared and settled over CDN $112 trillion or over $450 billion every business day.
RTR is partnering with IBM Canada, CGI, and Interac to support the delivery and operation of the RTR.
CGI is one of the largest independent IT and business consulting services firms in the world. Interac is a digital payments platform that works with over 300 different financial institutions. Its services are used 20 million times a day.
Interim co-CEO and Chief Delivery Officer of Payments Canada Jude Pinto said the partnership’s collective focus is to create a sustainable real-time payment system that will support long-term payment innovation while improving Canada’s economic competitiveness and driving value for Canadian consumers and businesses.
“The last component of the RTR, the clearing and settlement build, will continue through 2024 prior to initiating testing of the new system through 2025 and into industry testing in 2026. We know the ecosystem is anticipating the launch of the RTR, and we will have further details to share in the coming months,” said Pinto.
Executive Director of Fintechs Canada, Alex Vronces, added:
“To boost competition in Canada’s financial sector, Canada needs a real-time, always-on, data-rich payment system that has fair and level pricing for all participants, regardless of their size. More competition in financial services is a critical part of the broader agenda to make Canada a more affordable and productive place to live. We’re encouraged by Payments Canada and its members committing to launching the Real-Time Rail, catching Canada up to its G20 peers.”
Kellie Johnson, SVP of Americas at RedCompass Labs, shared a comment with CI expressing the announcement “gives us hope that innovation is on the way for Canadian Payments. Albeit a few years later than anticipated.”
“79 countries have already launched an instant payment scheme, including all of the G20, with the exception of Canada. While Canada trails behind other markets, the payments ecosystem now has a second-mover advantage. It can learn from other markets and time legislative changes with the rollout of the Retail Payments Activities Act (RPAA), Canada’s Consumer driven banking framework. Every major market that has introduced an instant payment scheme has seen a significant rise in fraud. For example, authorized push payment scams tripled from 2020 to 2021 in the UK. To mitigate this risk, anti-fraud solutions like Confirmation of Payee (CoP) services have been introduced and proven successful in the UK and other jurisdictions.”
Johnson said the Canadian financial industry is also demanding a fraud solution at RTR, so it is encouraging that Payments Canada has said that RTR will include a centralized fraud utility service, although it did not include any additional details.
The clearing and settlement build of RTR is expected to continue through 2024 before initiating testing of the new system through 2025 and entering industry testing in 2026.
