After more than a decade of development, eight financial institutions can now facilitate instant payments on a Canadian Real-Time Rail (RTR) payments system.
The news: National non-profit Payments Canada, which is developing the instant payments system, announced on Monday that its first phase is now online. As the name suggests, RTR will enable participating institutions to exchange, clear, and settle payments in real time, 24 hours a day, 365 days a year.
The eight launch members include FinTech companies like Toronto-based Wealthsimple and Koho, as well as Questrade’s new banking entity, Questbank. Other participants include the Peoples Trust Company, Paramount Commerce, DoBusiness.com, Digital Commerce Bank, and the Bank of America.
From the source: Payments Canada CEO Susan Hawkins called the launch “a new era for payments” in Canada.
“As a national asset that’s designed specifically for our country, the RTR gives the payment ecosystem a modern foundation to build on,” Hawkins said in a statement, adding that the “ecosystem will unleash its full potential.”
The context: The RTR system first began development as a payments modernization project in 2015. It was initially supposed to launch in 2019 but suffered multiple delays: first it was rescheduled to 2022, later it was pushed to mid-2023, and it was again delayed to 2026. Last week’s federal budget, tabled on Thursday, officially announced the launch date.
As BetaKit reported last month, RTR’s first phase includes none of Canada’s Big Six banks. Some in Canada’s FinTech community have criticized the lack of big banks in the initial rollout, including Koho CEO Daniel Eberhard, who told BetaKit that RTR would be largely performative without their participation. Wealthsimple chief compliance officer (and BetaKit board member) Hanna Zaidi wrote in a LinkedIn post that the system can only reach its potential once every financial institution is on it.
Final thought: The RTR system is being rolled out in phases to ensure “continued stability,” according to Payments Canada. The organization estimated that RTR will be available to more than nine in 10 Canadians within the first year after launch, and its launch-phase timeline indicates the system aims to have all participants in the initial launch phases processing their full transaction volumes on RTR by Q3 2027.
Feature image courtesy Payments Canada.