Real-time rail payments bring Canada into hold-free economy

The days of waiting two to three business days for bank transfers to hit from account to account could soon be over.

Next quarter, Payments Canada, the organisation that operates a payment clearing and settlement system within the country, will launch real-time payment transfers types from domestic wires to cheque deposits.

The program, called Real-Time Rail (RTR), will change Canadian Payments Association By-laws to enforce the sending and receiving of irrevocable, data-rich payments in real-time that will be settled in seconds and outside of traditional banking hours. By-law changes will come into force on August 24, 2026.

The payments will utilise the global ISO 20022 financial messaging standard, a structured XML framework that separates full invoice details, precise names, structured addresses, and purpose codes into distinct electronic folders.

"As Canada transitions from "read-only" data sharing to "write-access" financial services, the RTR will serve as the critical engine for secure consumer-driven banking. The RTR will provide the underlying infrastructure required to execute instant, irrevocable account-to-account transfers," said Donna Kinoshita, Chief Payments Officer at Payments Canada, in a statement. 

The transition was developed through formal public consultations in 2020 and 2025, educational webinars and close industry engagement.

Ana Badour, Partner, Financial Services, McCarthy Tétrault, said the instant nature of these changes is the key progressive change, but also a cause for security concerns. While RTR payments have new potential for fraud, as money sent to scams cannot be charged back.

"From a risk management perspective, you have to look at things very differently because it's almost like cash payments. They're moving instantaneously, and the transactions are cleared and settled finally, which means that you don't have that period necessarily to call back a payment that you would in some other types of payment methods," said Badour.

"Right now with fraud essentially exploding throughout all sorts of different mediums, it does create a new potential for fraud that had to be thought through and really addressed in terms of how the system was built. So there are protections built into there to deal with fraud specifically, which is in part why this framework took a fair bit of time to to put together."

Payments Canada reiterated that the RTR's rollout will come with a number of security features to deter fraudulent activity. This includes confirmation of payee capability, which will allow users to verify the account identity of the recipient before executing a transaction; and a safety score assigned to every transaction to help detect, prevent and mitigate fraudulent activity before authorising a payment.

In Payments Canada's third quarter update, the organisation announced member institutions were connecting to the system and interacting with the platform.

As Miller Thomson LLP's Financial Services Associate Nadim Elkommos explained, the change comes as more members are joining Payments Canada, which was traditionally limited within the realm of the country's big banks.

"Then you have the new players, which are payment service providers and some credit unions. If they meet certain criteria, they could become new members who can also benefit from having the real-time rail payment system," he said. "So it's not only law on paper, but it's also new members that have already joined and are getting ready to be part of the system and to be able to take advantage of it."

Payments Canada added 15 new members so far in 2026. This included Wise Payments Canada, KOHO Financial, and Neo Financial, to name a few.

However, the RTR shift comes years after other global banking hubs have implemented similar systems years prior.

"It's part of a global trend of real-time rail payments. We are seeing it in quite a lot of jurisdictions right now. We're certainly not the first, and there's been certainly some learnings from other jurisdictions," said Badour. "So these types of systems exist in a number of jurisdictions now, including the U.S., the UK, Brazil, etc."

The U.S. uses two real-time payment systems. The Clearing House's Real-Time Payment Network is managed privately by the country's largest banks, and FedNow is operated by the Federal Reserve. Those systems launched in 2017 and 2023, respectively.

Payments Canada estimates full transaction volumes amongst all partner institutions by the third quarter of 2027, with the Interac e-Transfer Clearing and Settlement migration process transitioning to the RTR within the first half of next year. That being said, Payments Canada has confirmed there is no absolute deadline for new participants to join the RTR once they achieve operational readiness.