Canada launches real-time payment system to speed up money transfers

Canadians will soon be able to send and receive money between bank accounts instantly with the launch of a new national payment system. Payments Canada announced the start of the Real-Time Rail system on Monday, which processes payments within seconds at any hour and on any day of the year. The system is expected to reach more than 90 percent of Canadians as financial institutions join over the next year. Finance Minister Francois-Philippe Champagne said the system was built around international standards.

The new rail allows consumers and businesses to send and receive payments in real time, a shift from the typical batch processing that can take days. This could enable gig workers and freelancers to be paid immediately upon completing a job. 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. Landlords and retailers could also receive funds instantly.

Bank of Canada Governor Tiff Macklem said the Real-Time Rail is an important step in modernizing Canada's payment infrastructure. The central bank has brought the new system under its formal oversight. The C.D. Howe Institute estimates the move could save Canada up to $14.5 billion in cost savings through lower processing costs, reduced use of cash and cheques, and a shorter period where funds are unavailable. Canada is the last of the G7 nations to implement such a real-time system. The system includes a fraud reporting and intelligence platform, a repository of fraud risks and a confirmation of payee feature. 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 means Canadians could transfer money between their own accounts at different banks instantly, which could be used to pay off a credit card or fund a brokerage account quickly.

Wealthsimple is an early adopter, with clients among the first to experience instant money movement between institutions through the rail. The company said it is currently testing capabilities, with plans to roll out new instant payment features in 2027. Many of Canada's major banks are expected to join as well. Royal Bank of Canada, for example, is expected to introduce Real-Time Rail in the second quarter of 2027. Anthony G. Ostler, president and CEO of the Canadian Bankers Association, said the rail will expand to include many of our members across Canada. The system has been in development since 2021 and was built with partners CGI, Deloitte Canada, IBM Canada and Interac. Champagne said over the next year, financial institutions and payment providers across the country will come on board, reaching more than 9 in 10 Canadians. The initial list of participating institutions is limited, but the rollout is now underway.

With files from Global News