Payments Canada has announced that, in collaboration with tech firms IBM and CGI, it will launch its Real-Time Rail system for fast digital payments as soon as 2026, after the initiative suffered a number of delays since it was first announced a decade ago.
The Ottawa-headquartered payments association said that the programme will proceed with “renewed momentum” following the completion of RTR’s exchange component in June 2023, which allows for the real-time swapping of payment messages and is provided by Canadian interbank network Interac.
“Over the past year, we have reviewed our path forward through engagement and collaboration from our members, regulators and key stakeholders,” said Jude Pinto, interim co-CEO and chief delivery officer at Payments Canada in a written statement.
Payments Canada said that the second part of the process, which is the clearing and settlement build, will be carried out throughout 2024, followed by the system and industry testing set for 2025 and 2026, respectively. A final launch date has yet to be announced.
The RTR system aims to boost transaction oversight and security for Canadian individuals and businesses by allowing payments to happen in real time 24/7 and 365 days a year, with their clearance and settlement secured in a matter of seconds.
Liz Oakes, real-time payments industry veteran and currently non-executive director at payment infrastructure provider Mangopay, said that the RTR system will allow Canada to get its payments sphere up to speed with systems in countries like the US and Mexico, as well as aligning its data standards with international systems through ISO 20022.
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“From an operational standpoint, this should make things an awful lot more harmonised and interoperable because, when you’re trying to introduce and explain new software and services for customers, using globally accepted standards is just so much easier,” she said.
This newly announced path forward for RTR “gives us hope that innovation is on the way for Canadian payments, albeit a few years later than anticipated,” said Kellie Johnson, senior vice-president, Americas at RedCompass Labs.
A total of “79 countries have already launched an instant payment scheme, including all of the G20, with the exception of Canada”, she said. “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, Canada’s consumer-driven banking framework.”
Several Canadian payments players reacted positively to the news in prepared statements.
By using ISO 20022 as the messaging standard, RTR will “allow more data to travel with each payment”, speeding and improving services to clients, said Dougal Middleton, member advisory council chair and vice-president, global payments platforms and client solutions at Scotiabank.
This announcement gives more clarity on the path forward for the RTR, said Andrew Moor, president and CEO, Equitable Bank and EQ Bank. “It is time Canadians are able to benefit from a modern payments system that will support people and businesses in improving their everyday financial lives.”
The real-time system “opens the door to innovative payment offers like mobile wallets and other application-based payments”, said Canada’s CGI president Guy Vigeant, which can also help boost financial inclusion.
Although it has suffered multiple delays since its announcement in 2016, Payments Canada’s RTR system is the latest step in the association’s infrastructure modernisation initiative, which aims to upgrade the country’s payments ecosystem and maintain its competitiveness within the fast-growing global digital market.
RTR’s launch announcement follows Payments Canada’s release of its high-value payment system, Lynx, in 2021. The system allows time-sensitive payments of considerable value to be processed in real time and with enhanced security measures. IBM Canada acted as the project’s lead technology partner.
