Roadmap for modern payments

Published: January 27, 2022

2021 was a big year for advancing modern payments in Canada. In partnership with our members and regulators, Lynx was launched — Canada’s modernized high-value payment system. Lynx replaced the Large Value Transfer System (LVTS), which served as Canada’s high-value payment system for more than 20 years. The transition to the new system was seamless thanks to the team at Payments Canada with support from our members and our regulators.

At the same time as delivering and launching Lynx, we continued to make progress on the Real-Time Rail payment system, with the selection and onboarding of Interac as the exchange solution provider. The exchange solution will interface with the clearing and settlement solution, provided by Mastercard’s Vocalink. In addition, progress was made in the many new rules and bylaws that must be developed to facilitate the Real-Time Rail payment system, and we continued to consult and collaborate with our many partners including members, regulators, advisory councils and industry stakeholders.

Broader access is a key driver in the modernization of Canada’s payment systems — and is fundamental to the success of the Real-Time Rail payment system as it will support more competition in the payment industry. In 2021, we achieved significant steps toward broader access to Canada’s payments systems with two major accomplishments: the Retail Payments Activities Act (RPAA) was included in the 2021 federal budget with support from the Department of Finance; and the approval of Peoples Trust Company to shift from an indirect clearer to a direct clearer in the Automated Clearing Settlement System (ACSS).

In December 2021, Payments Canada published an updated Delivery Roadmap confirming the introduction of ISO-based messaging on Lynx in November 2022. We also announced a change in the launch date of the Real-Time Rail payment system from September 2022 to mid-2023. I want to provide you with some additional information about the change in launch date.

As you know, the Real-Time Rail payment system will be the first new payment system launched in Canada since the LVTS was established in 1999. This system has never existed in Canada before, and so the rules and laws that ensure a safe, secure and accessible system must be in place for launch. Introducing a completely new payment system is a significant undertaking. The Real-Time Rail payment system is much more than technology. It is a large, complex technological build. As with all large and complex projects, it is often necessary to navigate unexpected challenges. In 2021, there were factors that were encountered — not least, managing the implications of a global pandemic — that had an impact on those involved in this project. Ultimately, the decision was made to shift the launch from 2022 to 2023.

I recognize that our shift of launching the Real-Time Rail payment system from 2022 to 2023 has created some frustration. But it's essential that we take the time to do this right. The project has been ambitious since its inception - with the original target date set for 2020. We are taking the time needed to make sure that Canada’s first Real-Time Rail payment system launches in conjunction with the necessary bylaws, rules, and policies to deliver a safe, secure, efficient service at launch that meets the needs of Canadians.

As those involved know, Payments Canada’s approach is very different from a number of other countries. Decisions were made at the onset, when the Vision was launched, to take full advantage of existing capabilities and markets so that, at launch, we deliver a service that is established with significant volume to support a competitive and accessible system. We are confident in our partners and our plans to deliver on this.

The payments industry has been a significant participant in all of our modernization initiatives. We couldn't have been successful in the launch of Lynx without the industry’s participation and the same is true of the Real-Time Rail payment system.

In 2022, I look forward to continued collaboration with our members, regulators, stakeholders and the broader payments industry. Working together, I know we can improve the payment experience for millions of Canadians.

Tracey Black
President & CEO
Payments Canada