After years of delays, Payments Canada has launched the Real-Time Rail (RTR), a national payment system that enables participating members to make, clear, and settle payments securely in real time.
Canada had been the only G20 country without such a system. Payments Canada initially targeted a 2019 launch, but the deadline was repeatedly pushed back over the years.
According to Payments Canada research, 60% of Canadian businesses want to use real-time payments to address challenges such as cash flow forecasting and delays in moving funds. More than half of Canadian consumers also expressed interested in using real-time payments.
Economic Benefits
The C.D. Howe Institute estimates that RTR could save as much as $14.5 billion over the next decade by lowering processing costs, reducing reliance on cash and checks, and minimizing payment float. Beyond these direct savings, the system is projected to generate up to $16 billion in broader economic benefits.
“Canada’s first major development in a domestic payment scheme dates back to 1984, when CIBC, Desjardins, RBC, Scotiabank, and TD formed Interac, a low-cost, highly successful alternative payments network,” said Brian Riley, Co-Head of Payments at Javelin Strategy & Research. “RTR will clear 24/7/365 and will provide strong fraud controls for operating immediate settlement and rich ISO 20022 data. The target is B2B, payroll, insurance disbursements, treasury, and embedded payments. It will surely accelerate Canadian payment modernization.”
The first group of participants includes a range of Canadian financial service providers, including online brokerage Wealthsimple, digital bank Questbank, and pay-by-bank firm Paramount Commerce. Payments Canada expects all major Canadian financial institution to join over the coming months, extending RTR access to more than 90% of Canadians within a year of launch.
Strong Fraud Controls
Fraud prevention has been a central consideration in RTR’s development. With its launch, Canada becomes the first G7 nation to introduce a real-time payment system with mandatory centralized fraud services in place from day one. These include confirmation of payee, a fraud transaction safety score, and a platform for reporting suspected fraud.
The system will initially have a $100,000 transaction limit, reflecting its initial risk controls and potentially constraining some commercial uses cases. Payments Canada plans to reevaluate the limit over time as the system evolves and additional use cases emerge.