The Real-Time Rail
Canada’s first national real-time payment system — will support faster, data-rich payments and act as a platform for payment innovation and competition.
The Real-Time Rail (RTR) will allow Canadians to initiate and receive payments within seconds, anytime of the day or night, 365 days per year. RTR payments will be irrevocable, meaning they are final and cannot be undone.
Underpinned by robust rules in line with Payments Canada’s public-purpose mandate, the RTR will level the playing field. The access model supports existing member financial institutions and, once legislative support is in place, non-bank payment service providers.
The new system will be operated by Payments Canada and overseen by the Bank of Canada. All participants will meet strict requirements from the Bank of Canada and Payments Canada to ensure the system meets the risk-management standards for designated financial market infrastructures, which the RTR will be at launch.
RTR Participants will be able to leverage the functionality of the RTR to enhance existing payment products, and to develop new payment products and services. As well, the RTR Exchange is designed to enable the introduction of future system features and functionality. For example, Request to Pay will support a business owner or individual being able to send an electronic request for a payment.
Features of the RTR
- FAST: Payment message exchange and transaction processing, including settlement, completed within 60 seconds.
- EASY: 24/7/365 real-time payment status notifications, providing transparency and certainty for end-users.
- SECURE: Accessible to direct participants that meet strict requirements.
- FINAL: Funds are irrevocable and will provide finality of payment for the Payor and Payee.
- ACCOUNT NUMBER-BASED ROUTING: Payment messages will route using account numbers to support a wide range of payment needs.
- UBIQUITOUS REACH: Widespread payment initiation and receipt, with the ability to reach nearly every deposit account in Canada.
- RISK-BASED ACCESS: All Payments Canada members will be eligible to participate provided they meet the risk-based access criteria.
- RISK MANAGEMENT: Safety and soundness ensured by the Bank of Canada’s Prominent Payment System risk management.
The RTR will go-live with the ISO 20022 financial messaging standard, and support more information travelling with every payment. This data will lead to faster reconciliation of the payment.
The RTR will enable Canada to better compete nationally and internationally with faster payment options, and will act as a platform for innovation, enabling the introduction of new and enhanced payment products and experiences. Participants in the payment system will be able to connect and develop new ways for Canadians — from consumers, businesses and governments — to pay for goods and services, transfer money and more, faster, easier and securely.
Governments Businesses Financial institutions Consumers
Real-Time Rail policy objectives
The RTR public policies have been directed by the Bank of Canada and the Department of Finance to ensure the RTR promotes fair and open access, enables competition and innovation, fosters fair and transparent pricing, implements appropriate risk controls and considers end-user interests. As such, the RTR policies have been defined to promote participation options for Payments Canada members and to support future access by new types of potential members.
The following risk management and public policy objectives guide the design and operation of the RTR:
The measurement and management of credit, liquidity, operational, and other risks through the RTR rules is developed to minimize the transmission of negative shocks between participants and other systems. A sound legal framework with robust and transparent rules for RTR participants (who must be Payments Canada members) is consistent with Payments Canada’s public purpose mandate.
A transparent, open and risk-based access framework for the RTR is set by Payments Canada, with complementary provisions in the Canadian Payments Act respecting membership, and the Bank of Canada requirements for RTR participants wishing to obtain a settlement account. The RTR access model facilitates access by non-bank payment service providers once the relevant legislative and regulatory supports are in place. Access requirements are based on function and the role potential participants wish to establish, and RTR participants will be able to choose between participating directly or indirectly in the settlement of their payments.
The RTR is a national real-time payment utility that offers efficient account-to-account transfers providing a wide reach to the vast majority of Canadian deposit accounts.
The system is designed so that all RTR participants are subject to the same rules and responsibilities. Payments Canada will fully control the evolution of the RTR system over time, including all components of the utility used to initiate and complete a payment.
The RTR pricing is set by Payments Canada and (as with our other systems) and is based on the true cost of use. The design of the system allows for fair competition among all participants to enable the development of innovative products and services that meet the needs of businesses and consumers at a competitive price point.
Go-live is designed based on the scope agreed to by Payments Canada, its regulators and a broad set of member institutions, with input from stakeholders. Any deviations from this agreed upon scope must receive appropriate approvals. Payments Canada continues to ensure that R1 functionality and design are acceptable to a wide range of stakeholders.
The RTR is designed to fully observe all of the Bank of Canada’s risk management standards for prominent payment systems, as per our expectation that the RTR be designated as a Prominent Payment System at go-live. This includes employing a cover-all, defaulter pay, credit-risk model with the Bank of Canada as the settlement agent, and a Real-Time Gross Settlement model.
The RTR timelines work with Lynx and other modernization priority timelines; notably, from a financial system risk perspective, as a collective priority was placed on the implementation of Lynx.
After go-live, the RTR will continue to evolve and be invested in, with additional enhancements and functionality being added on a prioritized basis, in consultation with members, stakeholders and regulators.
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