The Real-Time Rail is a new piece of national payment infrastructure that will allow Canadians to send and receive data-rich payments in real time. These payments will not only be sent and received in real time, but they will also clear and settle between RTR participants in real time, 24/7, 365 days a year. RTR payments are final and irrevocable, except in circumstances specified in the RTR rules.
The benefits of the Real-Time Rail
A seamless experience
Single credit transfers will be made and received any time, anywhere, making it easier for individuals and businesses to send and receive money, even outside of traditional banking hours, to any Canadian bank account.
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Real-time settlement
Financial institutions across Canada will settle transactions in seconds instead of waiting for deferred settlement times, reducing risks involved with providing provisional credit.
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Real-time liquidity management
With funds exchanged, cleared and settled in seconds, the Real-Time Rail will allow financial institutions’ clients — businesses and consumers — to better manage their money and make better financial decisions.
Real-Time Rail system components
The Real-Time Rail will be transformative, enabling new and innovative payment use cases, improving cash flow and providing greater certainty to businesses and consumers alike.
The Real-Time Rail is a complex, large-scale, multi-year infrastructure program that includes the following components:
- The real-time clearing and settlement component
- The real-time exchange component
- Third party exchanges flowing through the clearing and settlement component
- Centralized fraud solution
- Comprehensive by-laws, rules and standards
The Real-Time Rail is also designed to accommodate competitive or overlay services.
Explaining the Real-Time Rail
Payments Canada’s Chief Delivery Officer, Jude Pinto, explains the Real-Time Rail payment system and the value it will provide to Canadian consumers and businesses.
What is a real-time payment?
Real-time payments are single credit transfer push payments. When a real-time payment is initiated, the Real-Time Rail payment system exchanges a payment message between the sending and receiving financial institutions. Multiple communications then occur between the sending and receiving financial institutions in relation to the processing of the payment. The final message confirms the occurrence of settlement and that the receiver’s account has been credited. This entire process of exchanging and settling funds happens in seconds.
With the Real-Time Rail, a business can distribute payroll, bonuses and expense reimbursements to its employees anytime during the day or night. An individual can make a down payment on a new vehicle at the dealership in minutes without needing a bank draft or cheque. This gives it more flexibility around the management of payment cycles.