Further Delays in Canada’s Real-Time Rail System Spark Industry Frustration and Regulatory Challenges | National Crowdfunding & Fintech Association of Canada

Payments Canada has announced a further delay to the launch of the Real-Time Rail (RTR) payment system, causing industry frustration and concerns. This marks the second delay of the RTR launch, which was initially promised in 2022 before being rescheduled to mid-2023.

The current delay is attributed to “current delivery delays, unrelated to the exchange technology components,” and Payments Canada will conduct a review to understand and mitigate any future delays in the program​​.

• This further delay in the RTR system, described as “frustrating” and “disappointing” by industry participants, is said to impact not only the launch of the infrastructure but also the banks and other providers that have to make the technology available to their clients.
  • The current delay is attributed to “current delivery delays, unrelated to the exchange technology components,” and Payments Canada will conduct a review to understand and mitigate any future delays in the program​​.
  • The delay will provide additional time to validate and test the components and end-to-end integration of the RTR system. Despite the industry’s frustration, some experts argue that a cautious and methodical approach could lead to a better end result, especially to prevent potential issues such as payment outages, increased fraud, or misdirected payments​​.
  • In parallel, Payments Canada is making strides in other aspects of the country’s plans to overhaul its payment systems, such as introducing the ISO 20022 financial messaging standard to the Lynx system in less than two months, indicating that the country’s payment systems modernization effort continues despite the RTR delay​​

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• Impact on the Industry:
  • The delays could have significant repercussions on the financial industry. Banks and other providers need to know when the system will go live to plan for the technological developments, testing, and product development. The current uncertainty might cause a slowdown in these processes, thereby potentially affecting the overall readiness of the industry for the new payment infrastructure​​.
• Payments Canada is also considering expanding its membership eligibility to payment service providers (PSPs) as part of the review of the Canadian Payments Act, a move that could face resistance from larger banks who fund the new system and may not want to see their competitors benefit from it.
  • The potential expansion of Payments Canada’s membership to include PSPs could have significant regulatory implications and may result in a shift in the competitive dynamics of the Canadian financial sector. It could potentially lead to conflicts between larger incumbent banks and the government, which is pushing for wider participation in the payment system​​.

View Payments Canada Real-Time Rail (RTR) update –> here