Many Canadians will soon be able to move money between bank accounts faster and get paid more quickly with the launch of a new payment system for Canadian financial platforms.
Payments Canada on Monday announced the launch of Canada’s Real-Time Rail (RTR) payment system, allowing consumers and businesses to send and receive payments instantly.
From gig workers getting paid instantly to Canadians being able to transfer money between their accounts much faster, the new system could have impacts on how Canadians move their money.
RTR is “an important step in modernizing Canada’s payment infrastructure,” Bank of Canada Governor Tiff Macklem said on Monday, as the central bank brought the new payment system under its formal oversight.
Typically, payments are processed in batches, which can take a long time. With RTR, payments can be cleared and settled within seconds, 24 hours a day and seven days a week, including on holidays and weekends.
Canada’s RTR system has been in development since 2021 and was built in collaboration with delivery partners CGI, Deloitte Canada, IBM Canada and Interac.
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This makes Canada the last of the G7 nations to implement RTR, Payments Canada said in a press release, saying the move will come with a fraud reporting and intelligence platform, a “risk list or repository of fraud risks and indicators,” a fraud transaction “safety” score and confirmation of payee.
Lower processing costs, reduced use of cash and cheques, and reduced float (the period during which funds are temporarily unavailable to the recipient) would mean that Canada could save up to $14.5 in cost savings, the C.D. Howe institute estimates.
Canadians with accounts in different financial institutions can also transfer funds between their accounts in real time.
“Canada’s Real-Time Rail enables the secure sending and receiving of funds between accounts at different institutions in real time, offering instant me-to-me transfers to their customers,” Payments Canada said.
This money could be used for anything from paying off a credit card quickly or funding a brokerage account.
According to Payments Canada, this could change how employers pay their workers.
Typically, businesses must wait for the weekly or biweekly payday to process wages. With RTR, businesses can pay workers as soon as the work is completed. This will be especially helpful to gig workers, freelancers and contractors, Payments Canada said.
“It can help workers that are living paycheque-to-paycheque, helping them cover urgent bills or sudden expenses without relying on high-interest payday loans,” Payments Canada said.
The new payment system can also make payments to businesses much faster.
Landlords and property management companies can receive rent in real time with immediate confirmation of funds. Retailers, restaurants and other businesses can receive funds immediately from a customer purchase.
As of Monday, the intimal list of financial institutions participating in the new system is limited.
These are:
- Wealthsimple
- Questbank
- Peoples Trust Company
- Paramount Commerce
- KOHO
- DoBusiness.com
- Digital Commerce Bank
- Bank of America
“As an early adopter, Wealthsimple clients will be among the first Canadians to experience instant money movement between institutions through the RTR,” Wealthsimple said in a statement.
The company said it is “currently testing capabilities, with plans to roll out new instant payment features in 2027.”
However, many of Canada’s major banks are expected to join in as well. Royal Bank of Canada, for example, is expected to introduce RTR in the second quarter of 2027.
RTR “will expand to include many of our members across Canada,” said Anthony G. Ostler, president and CEO of the Canadian Bankers Association.
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