The Real-Time Rail: Where are we now?

By Jude Pinto

Since announcing renewed momentum with a stronger path forward earlier this year, Payments Canada and our delivery partners, CGI, IBM and Interac, have made significant progress on the Real-Time Rail (RTR). In late summer, we successfully commenced the build of the real-time clearing and settlement component of the RTR. Combined with the real-time exchange component, which was built in 2023, the exchange and clearing and settlement systems together will form a new piece of national infrastructure that is set to complement the country’s existing payment systems.

The RTR will also provide an uplift to Interac e-Transfer, which will use the RTR for the real-time clearing and settlement of its transactions. Enabling payments to be sent, received, cleared and settled in real-time, 24/7 and 365 days a year, will give Canadians unprecedented control over their finance: this immediate movement of money will reduce the time lag associated with traditional payment methods, allowing for faster access to funds and greater confidence in the finality of transactions.

The RTR is a complex, large-scale infrastructure program that encompasses both the installation of advanced hardware in data centers and the development of sophisticated software. The infrastructure for the RTR involves the setup and integration of hardware within data centers, including the installation of servers, storage systems and advanced networking equipment.

These data centers will be equipped with cutting-edge IT infrastructure to ensure high throughput, reliability and security. The hardware installations are complemented by significant software development, which includes coding for the real-time clearing and settlement system. Together, the team has developed a robust infrastructure design and is well underway in ordering and installing the hardware, in addition to coding. We will conduct comprehensive testing throughout the development process, beginning with internal system integrated testing, followed by performance testing and then industry testing. The RTR will only be launched once it has successfully completed all testing at full capacity. Testing is set to occur through 2025 and 2026, paving the way for a robust and reliable system that meets the needs of Canadians

A standout feature of the RTR is its emphasis on fraud mitigation. Unlike other jurisdictions that have launched real-time payment systems without centralized fraud capabilities, Canada’s RTR will be the first to include a centralized fraud utility service from day one. Centralized fraud services are essential to delivering a safe and secure real-time payment system and our proactive approach is designed to significantly minimize the risk of fraud ensuring a safer ecosystem for all participants.

The benefits of the RTR extend beyond just speed and security; it also promises to provide greater choice and a better experience for Canadians. The system will support the introduction of new payment products and services, which in turn will foster greater competition in the financial sector. This is especially important for smaller financial institutions and credit unions, as it may allow them to strengthen their position in the market and better engage in the competitive financial landscape. The Canadian Payments Act’s expansion of membership eligibility will further level the playing field, allowing a broader range of potential participants to directly access and benefit from the RTR if they meet system access requirements.

Additionally, the Retail Payment Activities Act, which is led by the Bank of Canada, provides supplemental safeguards to the financial system and allows Payments Canada to safely broaden access to our systems, including the RTR, if system access requirements are met.

Our team, along with our delivery partners, is dedicated to making the final stages of the project as efficient and transparent as possible. I’ll be sharing quarterly updates on the program’s progress and highlighting key upcoming milestones. Don’t miss the first video in this new series.

The RTR is a transformative initiative that will modernize Canada’s payment infrastructure, drive economic growth, enhance security and foster innovation. This new “made for Canada” real-time payment system will offer faster, safer and more convenient payment options that will have a significant impact on the financial lives of Canadians, for generations to come.

Jude Pinto is Chief Delivery Officer, Payments Canada