Payments Canada has selected Mastercard-owned Vocalink to be one of the providers for the country’s new real-time payments system, the Real-Time Rail (RTR).
The announcement came Thursday morning, with Payments Canada noting that Vocalink has been chosen as the vendor to provide the clearing and settlement services portion of the RTR.
The decision follows a more than year-long procurement process that included the Bank of Canada and the Department of Finance.
“Mastercard’s Vocalink business is a demonstrated leader in the real-time payments ecosystem.”
Vocalink is a London-based payment system company that was acquired by Mastercard in 2017. It is considered a leader in bank account-based payments systems. Its tech powers the United Kingdom’s real-time payments, settlements, and direct debit systems, as well as its network of nearly 60,000 ATMs.
Vocalink will provide the infrastructure and services to support the clearing and settlement for Canada’s RTR system.
“Mastercard’s Vocalink business is a demonstrated leader in the real-time payments ecosystem and they will be a valuable partner for Payments Canada in the introduction and ongoing operation of Canada’s real-time payments system,” said Tracey Black, president and CEO of Payments Canada. “Providing Canadians and Canadian businesses with access to faster, data-rich payment options will enable innovation, support the long-term growth of the economy, and strengthen our global competitiveness.”
Canada is currently in the process of developing RTR, a real-time payment system that is set to modernize the country’s core payments infrastructure. RTR will allow for payments to be sent and received within seconds. It is something that has been touted as key in a world of emerging FinTech startups.
The modernization project began in 2015 and consisted of consultations with more than100 organizations within the payments ecosystem. The idea behind RTR is to create a payment system that is fast, secure, flexible and allows for innovation. It is set to improve cross-border payments, transaction transparency, provide open oversight, and more.
Canada’s transition to real-time payments is long overdue; more than 54 other countries around the world already use this type of system. Vocalink currently provides real-time bank account-based payment solutions in Sweden, Singapore, Thailand, and the United States. It also has programs in progress in Nordic countries, Peru, the Philippines and Saudi Arabia.
Canada has long lagged behind other similar countries when it comes to financial services innovation. Aside from the long-awaited transition to RTR, FinTech startups in the country face barriers to receiving banking licenses and difficulties pulling customers away from Big Banks.
Payment Canada’s RTR is expected to launch in 2022. The system consists of two components: a clearing and settlement component and an exchange component. Payments Canada is in the final stages of the vendor procurement process for the exchange component.
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