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Canada's real-time payment system won't launch before 2026

Canada's real-time payment system won't launch before 2026

The launch of Canada's oft-delayed Real-Time Rail (RTR) payments system will now not happen until at least 2026, with new tech partners IBM and CGI brought in to the process.

Following the completion of a second review, the RTR programme will resume with "renewed momentum," says Payments Canada.

Part of a multi-year, multi-system payments modernisation initiative, RTR will allow Canadians to initiate payments and receive irrevocable funds in seconds, 24/7/365. The system will also tap the ISO 20022 messaging standard to support payment information traveling with every payment.

The exchange component, provided by Interac, was completed in June 2023 and will allow for the exchange of payment messages in real-time.

However, the second piece of the project, building the real-time clearing and settlement component, is not yet finished. That process will continue through 2024 prior to initiating testing through 2025 and industry testing in 2026.

A full launch date has not been provided, with Payments Canada interim co-CEO Jude Pinto saying only: "We know the ecosystem is anticipating the launch of the RTR, and we will have further details to share in the coming months."

Mastercard-owned Vocalink was initially contracted with providing the clearing and settlement infrastructure, with TCS onboard as integration lead.

However, in its update Payments Canada makes no mention of either firm, instead welcoming new partners IBM Canada and CGI, alongside Interac. Asked by Finextra if Mastercard and TCS are still involved, a spokesperson offered no comment.

Says Pinto: "Our collective focus is on building a sustainable real-time payment system that will support long-term payment innovation and the continued advancement of our economy, Canada's international economic competitiveness and provide value and benefit to Canadian consumers and businesses"

The latest "path forward" for the RTR comes after a series of delays. A launch had been mooted for as early as 2019 before a date was set for mid-2023. However, early that year, Payments Canada engaged a third party to review delivery assurance, with a focus on programme management, people and process.

This review completed in Q1 and recommended additional testing and investments to ensure ongoing operations once the RTR system goes live. That prompted the second review, leading to this week's update.

The other component of Canada's payments modernisation initiative, the Lynx high-value payment system, successfully launched in 2021.

Comments: (2)

A Finextra member
A Finextra member 17 April, 2024, 17:45Be the first to give this comment the thumbs up 0 likes

Likely the European Union legislation on real time payments mandate for all banks in the Euro area from September 2024 (receive RTP) will see serious delays as well. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 April, 2024, 12:25Be the first to give this comment the thumbs up 0 likes

"Canada's Real-Time Rail, a payments system that has been in development for several years and was originally set to go live this month, has been delayed again as the body that runs Canada's domestic payments networks pauses to perform a second review of the project's risks.", wrote Kate Fitzgerald on 26 Jun 2023 in an American Banker article (Disclosure: I'm quoted in this article).

No skin off my back since I'm not a taxpayer in Canada but a further delay of (at least) two years is ridiculous. It's not like RTR is something new - it's just another A2A RTP that has been implemented by 60 other countries in the last 15+ years starting from FPS in UK in 2008.

I'm guessing the latest delay is due to the third - or fourth or fifth? - review of the program's risk, just as the previous ones were. My unsolicited $0.02: If Canada does a Lloyds Bank style purge of its risk department
headcount, RTR might go live before end of 2025, if not 2024.