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Payments Canada has launched a consultation on the legal architecture of its much-delayed Real-Time Rail payments system.
The consultation, which runs until July 2, 2025, is seeking views on updates to the RTR, including a proposed by-law, draft rules and policy. It follows the consultation held in 2020 on the RTR’s foundational policy framework.
The draft RTR by-law and policy proposals were developed through consultation with members and regulators and stakeholders, and Payments Canada has said that the materials are intended to provide transparency and clarity on the legal and operational framework of the RTR.
“The RTR will enable instant, irrevocable and data-rich payments in Canada, fostering greater competition, innovation and financial control for Canadians,” the association added.
“It is expected to be designated a prominent payment system and meet the Bank of Canada’s risk management standards.”
Delays and setbacks
The RTR, part of Canada’s payments modernisation, underpins Payments Canada’s objectives of providing clear rules, open risk-based access enabling competition and innovation, and ubiquity, with wide reach to the majority of Canadian current accounts.
The real-time gross settlement (RTGS) payment system will offer exchange, clearing and settlement of irrevocable payments in real time, 24/7/365, and is intended to facilitate the final and immediate settlement of transactions between financial institutions on a per transaction basis.
Payments Canada includes strict expectations on processing times — once a payment is initiated on the RTR, it must be exchanged, cleared and settled within ten seconds and funds must be made available to the payee within 60 seconds of the settlement.
As covered by Vixio, the RTR is already seven years behind schedule thanks to repeated delays and changes in delivery partners.
Originally scheduled to launch in 2019, it has faced a series of setbacks and delays.
Another plank of Canada’s payments modernisation, the Lynx high-value payment system, was launched in 2021.
In January, Payments Canada announced that it was “halfway through” the technical build of the RTR, having made “substantial progress” on the new payments system since Q4 2024.
At the time, Jude Pinto, chief delivery officer at Payments Canada, said the association and its delivery partners, CGI, IBM and Interac, had made steady progress and were closer to the end of the process than the beginning.
The latest consultation represents the next step towards the introduction of Canada’s real-time payments system, which offers the prospect of instant and continuously available transaction processing.
Instant payments’ international spread
Real-time payments can offer precision and certainty as well as speed, and the data-rich transactions open new opportunities for businesses and consumers alike.
However, seamless interoperability between different systems and widespread take up are necessary for instant payment systems to realise their full potential, and these conditions are a significant challenge to achieve.
From November 2025, the full adoption of ISO 20022, the open global standard for financial messaging, will facilitate interoperability among real-time payment systems, and Canada’s RTR is set up to run on the new standards.
More than 70 different countries now have real-time payment systems in operation, and these are increasingly important to their financial systems.
The US Department of the Treasury, for example, has identified faster payments as a key plank of its National Strategy for Financial Inclusion, and the introduction of FedNow in 2023 was a significant advance in instant payments in the country.
However, industry experts believe that more is still needed to improve competition and innovation.
The EU, meanwhile, is in the process of implementing the Instant Payments Regulation (IPR), which sets deadlines including January 9, 2025 for euro area payment service providers (PSPs) to offer incoming instant credit transfers in euro, and October 9, 2025 to offer outgoing ones, with longer timelines (by 2027) for non-euro area PSPs.
One goal of instant payments is to enhance financial stability — more uptake could reduce consumer reliance on costly financial alternatives such as payday loans and overdrafts.
In addition, the RTR is intended to facilitate faster, more efficient cross-border payments.
However, in late 2024, US Federal Reserve Governor Christopher Waller poured cold water on hopes that bilateral faster payments linkages can solve cross-border payments challenges, pointing to scaling and implementation difficulties.
The tensions between the US and Canada in recent months will add a further layer of difficulty to ensuring the interoperability of real-time payments across the border between the two countries.
Nonetheless, the latest consultation should see the RTR move a step closer to going live, which will be good news for the payments organisations that have been waiting a long time for its introduction.
