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Canada’s Real-Time Rail Launch Is Delayed: What’s Stalling the Project?

Boaz Gam

Boaz Gam


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Article content
  1. What Is the Real-Time Rail?
  2. Why Does RTR’s Timeline Keep Changing?
  3. A Glance at RTR’s Development Perspectives

The Reasons Behind Canada’s Real-Time Rail Project Delays

Payments Canada, an organization responsible for Canada’s payment clearing and settlement infrastructure, has recently announced yet another delay in the launch of the Real-Time Rail (RTR) system. As the project’s revised launch date awaits confirmation, it is only natural to wonder what is pushing back its release.

This overview will shed light on the setbacks that are stalling the real-time payment initiative’s deadline already for the second time in its history and reveal its potential development trajectory in the near future. Read on for all the details!

What Is the Real-Time Rail?

The Reasons Behind Canada’s Real-Time Rail Project Delays

In a nutshell, the Real-Time Rail is a payments system that is set to revolutionize the country’s economy by facilitating instant, data-rich transactions. Once launched, this cutting-edge platform using the ISO 20022 messaging standard is expected to provide Canadians with unparalleled payment convenience, security, and transparency 24/7/365.

The project is conducted by Payments Canada in collaboration with multiple vendors. For instance, Vocalink, a subsidiary of Mastercard, is responsible for developing RTR’s clearing and settlement infrastructure, while Interac, a local debit network, serves as the exchange solution provider. Moreover, Tata Consultancy Services (TCS) has been engaged as the system’s integration lead.

According to Payments Canada, the launch of the RTR initiative will be extremely beneficial for all user groups, including:

  • Consumers. Having access to convenient and flexible real-time payment services translates to a wider range of options for sending and receiving money for consumers and significantly shorter waiting times.
  • Businesses. With the help of secure real-time payments enabled by RTR, Canadian businesses are sure to experience enhanced financial liquidity and operational efficiency.
  • Financial Institutions. By embracing the modernized Real-Time Rail, FIs will gain real-time liquidity management capabilities, enabling faster payment settlement and the provision of state-of-the-art services to their clients.
  • Payment Service Providers. Once launched, the RTR will foster competition among PSPs, resulting in a wider array of service choices for Canadian businesses and consumers.
  • Developers. Real-Time Rail participants will have the opportunity to connect and create novel ways of conducting payments, facilitating seamless transactions for Canadians while competing on national and international levels.
  • Government. By leveraging RTR’s data-rich transactions, the Canadian government will be able to effectively streamline financial, corporate, and reconciliation processes.

As you can see, the potential impact of the Real-Time Rail project on the Canadian payment ecosystem is going to be massive, which is why its creators must make sure that it is completely secure and error-free before its grand launch.

Why Does RTR’s Timeline Keep Changing?

The Reasons Behind Canada’s Real-Time Rail Project Delays

Initially, the Canadian Real-Time Rail was scheduled to go live in mid-2022, yet the deadline was eventually postponed to June 2023, as stated in the project’s Q2 update published in July 2022.

Later on, in the Q3 Roadmap Delivery update released on October 11 last year, Tracey Black, president and CEO of Payments Canada, revealed that RTR’s go-live date had to be pushed back once more to allow for extra validation and testing of the various components of the system and to ensure its seamless end-to-end integration.

Black’s statement also mentioned that the launch of Lynx, Canada’s high-value clearing system that had been up and running for one year by the time of the publication, would have been impossible without the industry’s participation, and the same was true for RTR. This referred to the fact that Payments Canada was working with multiple stakeholders on updating the project’s timeline.

On June 13, 2023, Payments Canada published a new statement, which marks the RTR project’s third major delay. According to the official news post, the latest hold-up is not related to the exchange technology components and requires further research. To get to the bottom of it, Payments Canada will undertake a three-month investigation into the key risks identified in the RTR’s delivery process.

Payments Canada recognizes the impact of the RTR’s launch delays on the payments landscape. However, the company also stresses the importance of the final product’s alignment with established public policy objectives, as it strives to provide a secure, stable, and effective payment platform that will enable Canada to remain competitive on the global stage.

A Glance at RTR’s Development Perspectives

The Reasons Behind Canada’s Real-Time Rail Project Delays

Although Payments Canada has not shared the specific details on the issues causing the latest hold-up of the Real-Time Rail’s launch yet, many industry experts agree that it did not come as a surprise, given the project’s complexity and intricate technological requirements.

The public perception of the timeline delays for the Real-Time Rail project seems to be split into several distinct camps. Some interpret them as a sign of the local payment ecosystem’s lack of preparedness for significant changes, arguing that if the ecosystem was ready for innovation, the project would have progressed more smoothly and met its original deadlines.

Another perspective on the project’s slow progress stresses the fact that the initiative is limited by the pace of its slowest participant, acknowledging that implementing a complex project like the RTR involves collaboration among multiple stakeholders, including FIs, PSPs, government entities, and technology vendors.

Others explain the timeline delays with the dynamic nature of the global payments landscape, with new technological advancements, risks, and compliance requirements arising at a rapid pace. These factors can introduce new challenges that need to be addressed during the development and implementation of the RTR system.

Overall, it is hardly possible to point out a single cause stalling the Canadian Real-Time Rail’s launch at this point. Due to this, it would also be unfeasible to rule out the chances of further delays. Yet, while the project’s timely implementation is important, ensuring its integrity, security, and stability remains paramount, making all existing and potential deadline shifts justified.

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