As FinTech sector anticipates open banking in Budget 2024, Payments Canada reveals no Real-Time Rail until at least 2026

Payments Canada did not share when it hopes to officially launch the RTR payment system.

While Canada’s FinTech ecosystem awaits legislation to make open banking a reality—which the federal government has promised for Budget 2024—it remains unclear when the country can expect to see the Real-Time Rail (RTR) payment system launched.

Today, Payments Canada announced that following the completion of its latest review, the development of the long-anticipated and oft-delayed RTR has resumed, but did not share a date for when the country can expect a new, modernized payment system to be implemented.

“It’s hard to be excited about something that’s been so fraught with uncertainty.”

Alex Vronces, Fintechs Canada

In a statement, Payments Canada interim co-CEO and chief delivery officer Jude Pinto indicated that the last component of the RTR, the clearing and settlement build, will continue in 2024, followed by initial testing in 2025 and industry testing in 2026. 

Pinto did not disclose when Payments Canada hopes to ultimately launch the RTR, promising only to disclose more details “in the coming months.”

“It’s hard to be excited about something that’s been so fraught with uncertainty,” Alex Vronces, executive director of Fintechs Canada, which represents Canadian FinTech firms, told BetaKit. “Is it going to happen or is it not? This latest announcement doesn’t tell us when the system is going to launch. All we know is when industry testing is supposed to happen.”

Canada is currently developing the RTR to modernize the country’s core payment infrastructure and allow payments to be sent and received within seconds. These efforts are being spearheaded by Payments Canada, a non-profit that reports to the Government of Canada.

Payments Canada initially promised to deliver the RTR in 2019, but the process has been fraught with delays. Its launch was pushed back to 2022, then rescheduled for mid-2023, and last June, the RTR was delayed once more as it underwent two reviews.

RELATED: Tracey Black to step down as president, CEO of Payments Canada

Meanwhile, last month, Payments Canada president and CEO Tracey Black, departed after choosing not to renew her five-year leadership term. In her stead, Payments Canada has appointed Pinto and CFO Kristina Logue to the roles of interim co-CEO.

Canada’s FinTech sector has expressed frustration as the implementation of both RTR and open banking (which falls under the Government of Canada’s jurisdiction) has been repeatedly delayed.

In its latest Fall Economic Statement, the feds made two related commitments: to amend the Canadian Payments Act to expand membership eligibility for Payments Canada to firms other than big banks and to introduce open banking legislation in Budget 2024, which is set to be released later today.

The RTR is a large, complex infrastructure program that includes two key technical components: the build of the RTR exchange by Interac—which was completed in June 2023 and will permit the exchange of payment messages in real-time—and the real-time clearing and settlement piece.

RELATED: Federal Fall Economic Statement promises to expand Payments Canada eligibility, introduce open banking legislation in 2024

Mastercard’s Vocalink was previously chosen as the RTR’s clearing and settlement solution provider, and Tata Consultancy Services was tasked with integrating the system.

Payments Canada also shared that its path forward will include two new partners—IBM Canada and CGI—who along with Interac, will support the delivery and operation of the RTR. IBM Canada was the lead tech partner for the implementation and operation of Canada’s Lynx high-value payment system. 

According to Payments Canada, going forward, CGI, IBM, and Interac “will together provide the applications, infrastructure, and operations” for RTR. The announcement did not mention Mastercard’s Vocalink or Tata Consultancy Services, or whether either firm is still involved with the development of the RTR.

“Changes like this, coupled with new deadlines on milestones, make me more hopeful than I was before the announcement that this is all going to happen,” said Vronces. “But to really get excited we need more regularity in these updates and more transparency from Payments Canada. It’s the only way to rebuild the trust with the market that’s been broken.

With files from Douglas Soltys.

Feature image courtesy Pixabay. Illustration by Mohamed Hassan.

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache.

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