Canada’s long-awaited instant payment system, Real-Time Rail (RTR), likely won’t include any of the country’s largest banks as participants in its first phase, BetaKit has learned.
Daniel Eberhard, Koho
If a payment rail is built that “95 percent of the country doesn’t use or have access to, it’s kind of performative.”
The RTR system is meant to be an instant, always-on payment infrastructure for Canadians and their financial institutions to transfer funds. The system is under development by the national non-profit Payments Canada, which has a government-created mandate to handle the country’s payment systems. The RTR system’s rollout—the first phase of which is slated to go live in the fourth quarter of 2026—would also allow emergent financial companies to move money for customers without relying on banks or paying them a fee.
But four sources within the FinTech ecosystem that have knowledge of the rollout said none of Canada’s Big Six banks are currently scheduled to participate in its first phase, raising questions about how useful RTR will be without the banks, which settle the vast majority of the country’s payments. BetaKit is not naming the sources because they were not authorized to discuss the matter publicly.
To send and receive payments via RTR, both parties will likely need to be onboarded to the new system; otherwise, institutions will have to use existing payment rails to move funds on behalf of customers. Two sources told BetaKit that the RTR system has little value if banks don’t participate because payment volume would be relatively low.
In an emailed statement, Payments Canada chief payments officer Donna Kinoshita declined to share which institutions are participating in Phase 1 “to protect the integrity of testing and launch,” noting that more information would be provided once the system is live and participants are onboarded.
BetaKit reached out to all Big Six banks to ask if they would be participating in RTR’s first phase. Royal Bank of Canada, National Bank, and Scotiabank had not responded by press time; Toronto-Dominion Bank, Bank of Montreal, and the Canadian Imperial Bank of Commerce referred BetaKit to the industry group Canadian Bankers Association (CBA) for comment.
A CBA spokesperson did not say if any of these banks would participate in RTR’s first phase, but wrote in an email that it “supports the multi-wave approach of the RTR implementation, which will expand to include many of our members across Canada.” They added that the banking industry is “actively engaged in Payments Canada’s payment modernization efforts.”
Long-delayed process
The RTR system first began development as a payments modernization project in 2015, with a target launch of 2019. Since then, it has been fraught with delays: Payments Canada pushed back the rollout to 2022, then later rescheduled it for mid-2023, and again to 2026.
Canada is the only country in the G7 without an instant payment rail. RTR is meant to support higher-priced transactions of up to $100,000 and settle them instantly. Existing payment rails are limited by speed and transfer size. When making payments, Canadians typically see money leave their accounts right away, but transactions are actually settled within hours or days—which is why it can take up to three business days for a credit card payment to post. While Interac’s e-Transfer system is faster than those traditional payment rails, it typically limits consumer transfers to $3,000, and businesses to $25,000.
The Bank of Canada’s senior deputy governor, Carolyn Rogers, said in a speech last year that RTR and open banking are two important changes coming to Canada’s financial sector that will likely improve competition. The establishment of RTR could bring more than $3 billion in efficiency gains to the Canadian economy over its first five years, according to a 2023 study by think tank C.D. Howe Institute.
On an upcoming episode of The BetaKit Podcast, Koho founder and CEO Daniel Eberhard confirms he has heard that banks would have “very little participation” in the first phase of RTR. He said Koho is trying to be part of the first phase because he believes it’s the company’s “civic responsibility” to help facilitate payments in Canada. But if a payment rail is built “that 95 percent of the country doesn’t use or have access to, it’s kind of performative,” he said.
“The real test will be how much of Canada’s payment volume actually moves onto the rail, and whether all participants, including FinTechs, have fair access to connect and compete.”
Fintechs Canada
To participate in RTR, firms must be members of Payments Canada. Previously, membership has only been open to banks, credit unions, and other traditional financial institutions. But earlier this year it began welcoming Canadian FinTech firms like Float, Wealthsimple, and Koho after they became payment service providers. (Wealthsimple vice-president of payments strategy and chief compliance officer, Hanna Zaidi, sits on BetaKit’s board of directors). While banks must be members of Payments Canada, they are not currently mandated to participate in the RTR system, sources indicated to BetaKit.
FinTech companies must currently partner with banks to use their infrastructure and payment rails, and sometimes pay fees to do so. Right now, only select financial institutions have direct access to Canada’s payment rails, which collectively support 99 percent of daily transactions. Opening direct access to rails through RTR would, in theory, improve financial competition in Canada by putting banks and FinTech companies on a more level playing field.
While it’s unclear when individual banks will be onboarded to the RTR system, a spokesperson for the Department of Finance told BetaKit in an email that it will “work to have all major financial institutions participate in the Real-Time Rail by summer 2027.”
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In an email to BetaKit, Payments Canada’s Kinoshita noted that every RTR participant must meet “rigorous technical, operational, and security requirements” before going live. “The phased rollout is designed to balance the system’s scalability with the stability, safety, and resiliency required of critical national infrastructure,” Kinoshita said in the email.
When the phased rollout is complete, some say Canada could find itself with infrastructure already outpaced by existing options. Eberhard added that the pace of payments innovation on stablecoins, which allow for free international transfers, plus the relative utility of the Interac e-Transfer system within Canada, begs the question of how valuable RTR might turn out to be.
“What is the marginal value of the Real-Time Rail relative to Interac,” Eberhard asked, if the latter payment system decided to raise its payment limit to $100,000 too? Interac is helping build the RTR as an exchange solution provider, meaning that some of its existing infrastructure and connectivity will be used for the new payment rails. Koho is also now part of Interac’s e-Transfer as a direct member, joining other Canadian FinTech firms Neo and Wealthsimple in getting direct access to the digital payment system. “I’m sure Interac wants that [payment] volume, so we’ll see how the industry sorts this out,” Eberhard said.
Industry association calls for “adoption scorecard”
Still, the industry at large is eager to see RTR finally implemented. On Monday, non-profit industry association Fintechs Canada called on Payments Canada and the federal government to publish an “adoption scorecard” to track participation in the RTR system. “The real test will be how much of Canada’s payment volume actually moves onto the rail, and whether all participants, including FinTechs, have fair access to connect and compete,” the organization wrote. This prompt followed a recent report from The Globe and Mail saying that Canada plans to link “next-gen payment systems” with the European Union.
Payments Canada says that RTR will go live in a phased rollout, progressively adding participants. On its website, it now lists the launch phase target timeline as follows: an initial launch in Q4 2026, followed by initial Interac e-transfer clearing and settlement participants in Q1 2027, another Interac e-transfer migration phase in Q2 2027, and finally, full capacity by the third quarter of 2027.
The timeline of full RTR rollout may impact other long-delayed files in Canada’s payments sector. Open banking, a consumer-directed finance system also meant to improve financial service competition, is set to launch soon. But according to the 2025 federal budget, the mid-2027 target for open banking “write access” appears dependent on the release and “widespread use” of RTR.
With files from Douglas Soltys.
Feature image courtesy The Payments Canada Summit via LinkedIn.