{"id":33477,"date":"2025-05-27T14:34:49","date_gmt":"2025-05-27T18:34:49","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=33477"},"modified":"2025-05-29T16:56:38","modified_gmt":"2025-05-29T20:56:38","slug":"real-time-rail-an-unprecedented-payment-system-with-inherent-challenges","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/financial-services\/real-time-rail-an-unprecedented-payment-system-with-inherent-challenges\/","title":{"rendered":"Real-Time Rail, an unprecedented payment system with inherent challenges"},"content":{"rendered":"\n

The implementation of Canada\u2019s real-time payment system, the Real-Time Rail (the \u201cRTR<\/strong>\u201d), is expected to revolutionize the Canadian payments ecosystem by offering real-time digital payments, 24\/7, 365 days a year. The Canadian Payments Association, commonly referred to as Payments Canada and responsible for Canada\u2019s payments clearing and settlement infrastructure, conducted a public consultation between February and March 2025 regarding its policy proposals<\/a>.  <\/p>\n\n\n\n

What is RTR?<\/h2>\n\n\n\n

Payments using the RTR<\/a> will be sent, cleared, and settled within seconds, giving both the sender and the recipient confidence that the payments have been finalized and eliminating traditional delays. For example, businesses could make payroll or other bill payments at any time of the day, thereby permitting greater flexibility in payment cycles. Additionally, merchants with certainty of receiving funds would require fewer assurances, such as bank drafts, from consumers \u2013 bringing both speed and convenience to the contracting parties. Such a system is therefore expected to foster economic growth by enhancing cash flow management and generally enabling better supervision over liquidity.<\/p>\n\n\n\n

Who can use RTR?<\/h2>\n\n\n\n

As currently structured, the RTR payment system would only be available to members of Payments Canada. In June 2024, the Canadian Payments Act<\/em> was amended<\/a> to expand membership eligibility. While banks have always been mandatory members of Payments Canada, once amendments come into force on a day set by the Governor in Council, membership could be obtained by\u00a0several other entities, such as payment service providers (\u201cPSP<\/strong>\u201d) that perform retail payment activities pursuant to the Retail Payment Activities Act<\/em>. These PSPs<\/a> include not only payment processors but also digital wallets, currency transfer services, and other technology firms that offer payment functions. By doing so, Payments Canada opens the door to non-traditional players, such as fintechs, to play an increasingly important role in the payments ecosystem. \u00a0\u00a0\u00a0<\/p>\n\n\n\n

That being said, new members of Payments Canada would still need to meet existing membership requirements<\/a>, such as having a settlement account from the Bank of Canada.  <\/p>\n\n\n\n

What updates are expected?<\/h2>\n\n\n\n

In February 2025, Payments Canada proposed several amendments (PDF)<\/a> to its by-laws and rules to address the entry of new players: <\/p>\n\n\n\n